Nomura Lowers LinkedIn Target To $235, But Remains Constructive

Nomura issued a report highlighting LinkedIn Corp LNKD ahead of the company's 4Q15 earnings call scheduled to take place on February 4. Nomura reiterated its Buy rating for the social media company, but lowered the price target from $290 to $235.

Analyst Anthony DiClemente wrote, "We lower our target price to $235 to account for recent sector multiple compression, but we remain constructive on LNKD given the visible growth drivers in ‘16 and beyond."

Analysts at Nomura noted that with the recent decline of the stock market, the earnings bar for many companies including LinkedIn may be lowered in the current quarter and 2016 as a whole, which may allow the company to outperform consensus estimates.

Related Link: Bob Peck: Look Forward To LinkedIn's Second Half

While investors have discussed concerns surrounding LinkedIn's long-term profit margins and its ability to scale its business, Nomura is more optimistic as LinkedIn currently is the market leader in social media for professionals and has opportunities to further monetize the business and drive advertising revenue growth in 2016.

Analysts project total revenue growth of 25 percent over the next three years and notes that the company's long-term margins could improve in part due to the company's leading position and popularity in the professional sector.

Shares traded recently at $185.90, down 1.8 percent on the day.