BMO Remains Constructive On Yahoo's Core Business Sale

BMO Capital reiterated its Market Perform on Yahoo! Inc. YHOO and lifted its price target to $39 from $38. In the report, the analysts described the company's Q2 results announcement as lacking news on the core business sale process.

"CEO Mayer noted that the company is deep into the process of evaluating proposals and investors are anxious for an outcome." wrote BMO, adding it continues to believe Verizon Communications Inc. VZ is the most sensible buyer, to combine with AOL, cut costs and leverage proprietary first-party data.

Related Link: The Biggest News From Yahoo's Earnings Report Was The Lack Of News On The Core Sale

According to the analysts, Yahoo is still unable to increase traffic in Search, despite new monetization partnerships, while in Display, the mix of programmatic and mobile were again headwinds. They believe the expectations for proceeds from a core business sale should remain conservative, given the continued challenging fundamentals.