4 Ways AOL Rewards Shareholders This Year (Or Doesn't)
On Wednesday, Jefferies issued a company note on AOL, Inc. (NYSE: AOL) after the company posted fourth quarter revenue of $710 million, which fell short of analyst estimates of $721 million, and earnings per share of $0.92 which beat estimates of $0.72.
Currently Jefferies rates AOL as a Buy and lowered its price target from $70 to $67.
Analysts Brian Pitz, Brian Fitzgerald, Sachin Khattar, Timothy O'Shea and Corey Werbelow gave two scenarios in the report showing the upside and downside potential for investing in AOL.
1. AOL achieves over double digit organic growth next year from re-acceleration from Platform.
2. Network revenues continue to grow and scale.
3. The company is able to increase APRU for current access customers.
4. 2015 OIBDA: $540M; Target Multiple: 11.0x; Target Price: $74.
1. Organic growth on the Advertising platform doesn't achieve industry level growth.
2. Access churn starts to tick up. The rate has consistently decreased from 3 percent during the first quarter of 2010 to 1.3 percent by the end of fourth quarter of 2014.
3. AOL is unable to increasingly diversify away from non-subscriber traffic.
4. 2012 OIBDA: $416M; Target Multiple: 6.0x; Target Price: $31.
AOL is down 0.55 percent on Thursday morning.
Latest Ratings for AOL
|May 2015||UBS||Initiates Coverage on||Neutral|
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