UBS Frames Yahoo's Downside Off Tax Fears

In a report published Wednesday, UBS analysts maintained a Buy rating on

, with a price target of $59, after a dip in the company's share price on tax fears. Yahoo's shares responded to media reports of the IRS planning to explore new rules for tax-free spin-offs. Any change in these rules would impact Yahoo's planned spinoff of its stake in

. In the reprot UBS noted, "While we do not have any details on the progress of Yahoo's case, on the Q1 2015 earnings call, Yahoo's CFO Ken Goldman stated "we have submitted a request for a Private Letter Ruling to the IRS", suggesting that Yahoo's case may already be in motion." The analysts further commented, "At an investor conference today, Yahoo CEO Marissa Mayer expressed confidence in both Yahoo's ability to move forward with monetizing assets in a tax efficient manner & the ability to achieve display revs growth driven by mobile, native, video & social ads." The analysts estimate Yahoo's fair value at around $40 per share. Following the after-market correction in Yahoo's share price, the fair value is merely 3 percent below the stock's current trading price.