Argus Upgrades LinkedIn; Sets $280 Price Target

In a report published Monday, Argus analysts upgraded the rating on

from Hold to Buy, with a price target of $280. LinkedIn significantly reduced its 2015 guidance to reflect poor sales execution, FX headwinds and dilution from the pending lynda.com acquisition. The company's share price plummeted more than 18 percent on May 1, following the news of the lowered guidance. The EPS estimates for 2015 and 2016 have been reduced from $2.98 to $1.90 and from $3.90 to $3.52, respectively. In the report Stifel noted, "The sales force transition may have been management's first significant mistake, but in our view, the move also positions the company for future growth, perhaps just not as much as previously expected in 2015. In addition, we see LinkedIn's foreign exchange woes as transitory, and note that currency issues have hurt nearly all U.S.-based companies in our coverage group." "While LinkedIn may have a few more quarters of pain ahead, we think that its problems are essentially transitory and that its business model is resilient enough to overcome them…Even with the recent selloff, valuation metrics for LinkedIn remain high, which means that the company will have to sustain very high growth rates for many years," the analysts added.