Is Yahoo The Ultimate 'Buy The Dip' Bet?

In a report published Thursday, Bernstein analyst Carlos Kirjner upgraded the rating on

from Market Perform to Outperform, while maintaining a price target of $52. Yahoo own 394 million shares of

. At Alibaba's current share price, Yahoo's stake is worth $18.40 per share. "Yahoo! has about $4.40/share in net cash and has bought back large amounts of stock over the last 12 months (despite a recent pause), so we think we should give it credit for the cash," analyst Carlos Kirjner wrote. In the report Bernstein noted, "Despite being very bullish on Alibaba, we have been cautious on Yahoo! because so far we believe investors who buy into our Alibaba thesis are better off investing directly on Alibaba and not taking any of the risks associated with owning Alibaba indirectly through Yahoo!." Kirjner added, however, that Yahoo's share price was now about $34 per share, which reflected "a future corresponding to (almost) the worst case scenario on many fronts." With the current stock price, the fundamental analysis and sum-of-the-parts suggested "limited downside versus significant potential upside." Bernstein's 2016 EBITDA estimate for the core is at $732 million, significantly below the consensus estimate of $1,011 million.