SunTrust Upgrades WebMD Shares To Buy Following Q1 Results

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SunTrust Robinson Humphrey analyst, Sandy Draper, responding to
WebMD Health Corp.WBMD
's first-quarter earnings report, upgraded the stock from Neutral to Buy Thursday morning. "We see the positive biopharma market growth as a sustainable tailwind to drive double-digit top line and high teens EBITDA growth for 3-5 years," Draper said. "WebMD has demonstrated that it is a demand-driven model with ad-revenue in 1Q16 growing at 15.7% y/y, which far outpaced the 4% growth in page-view traffic observed over the same time frame. We reason that the incremental benefit of additional page-view traffic is less important to drive revenue growth given WBMD ranks number one in unique visitors (about 50% more than nearest competitor), page views (2.5x nearest competitor) and time spent on the website by a wide margin," according to the SunTrust analyst. Amid increased sales estimates, Draper boosted her price target on WebMD shares from $57 to $75. Although volatile over the course of Thursday's session, the stock closed up a moderate 0.85 percent at $63.29 Thursday. Draper's new price target represents potential upside of about 19 percent.
Posted In: Analyst ColorEarningsNewsUpgradesPrice TargetAnalyst Ratings
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