J.P. Morgan's Internet Sector Summary
In a report published Monday, J.P. Morgan analyst Doug Anmuth summarized the Internet Sector coverage. Here are some highlights.
Approaching 3Q earnings, J.P. Morgan remained confident with Facebook, Inc. (NASDAQ: FB), priceline.com Incorporated, Inc. (NASDAQ: PCLN), and eBay, Inc. (NASDAQ: EBAY). Anmuth specifically noted a "potential upside to our 10% Q/Q Advertising revenue growth and $842M in mobile ad revenue" for Facebook and saw Priceline as more aggressive than Kayak for the quarter.
J.P. Morgan reported encouraging eCommerce data from the UK and Western Europe which should trickle down to eBay and possibly Amazon.com Inc. (NASDAQ: AMZN).
The analyst remained cautious on TripAdvisor Inc. (NASDAQ: TRIP). Anmuth stated, "we believe there could be a near-term pullback as shares have generally looked past TRIP management's caution around 3Q, the heaviest period of meta impact. We would not be surprised to see revenue parity under meta pushed out another quarter or two as OTAs continue to push back on price increases and look to diversify their traffic sources."
The analyst raised Netflix's PT from $290 to $340 and noted expected strong 3Q US streaming net adds with the increase of subscriber momentum continuing into 2014. Anmuth also saw Netflix's huge content selection appealing to a wider audience and raised 2015 US streaming subscriber, revenue and EBITDA estimates. J.P. Morgan increased Yelp's PT from $52 to $75 based on the expectation of solid 3Q results. Anmuth commented, "we believe monetization is still in the very early stages and we believe the pace of ad products is accelerating which should drive continued strong revenue growth going forward."
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