MKM Starts 'Long-Term Winner' LinkedIn At Buy; Says 'Talent, Marketing Alone Justify Stock'

In a report published Tuesday, MKM Partners analyst Rob Sanderson initiated coverage of LinkedIn Corp LNKD with a Buy rating and price target of $285. The analyst believes that the stock would be much more valuable going forward, and the talent solutions and marketing solutions businesses by themselves justify the stock.

"We view LNKD as a unique and powerful asset that has been superbly managed to become an excellent business with open-ended potential for growth," Sanderson stated, adding that the stock "should be an overweight component within large-cap growth portfolios."

While the analyst sees LinkedIn as providing differentiated products and executing well on the fairly large market opportunities, the management believes that the Talent Solutions products already address more than a quarter of the $85 billion staffing and recruitment market, with an additional identifiable pipeline worth $12 billion.

The management also sees the Marketing Solutions business as being well positioned to capitalize on the $45 billion ad spend in the B2B and B2C arenas. In addition, the analyst expects Lynda.com and Sales Navigator to drive upside, with the two business addressing market opportunities worth $30 billion and $15 billion, respectively.

"We think LNKD is a long-term winner and recommend building or adding to positions ahead of earnings results on Thursday," Sanderson added.