With LinkedIn's M&A Now Priced In, Goldman Downgrades Stock To Neutral

Goldman Sachs has downgraded LinkedIn Corp LNKD to Neutral from Buy following its announcement to be acquired by Microsoft Corporation MSFT for $196 per share ($26.2 billion net of cash acquired).

"We are Neutral on LNKD as we now see M&A potential as more fully reflected in valuation, and we see limited further upside. We continue to view LinkedIn as a valuable platform with a unique network of users, interactions, and data," analyst Heath Terry wrote in a note.

Related Link: Is Microsoft-LinkedIn 'Creating The Facebook For The Enterprise?'

Terry expects LinkedIn's revenue and adjusted EBITDA to grow at a three-year CAGR of 23 percent and 27 percent, respectively.

"However, with shares now trading at 20X 2017E EV/EBITDA vs. the 15X average for our coverage, we see the risk/reward as more balanced," Terry added.

Shares of LinkedIn closed Monday session at $192.21. The analyst raised the price target to $203 from $162.