Piper Jaffray Reiterates Neutral Rating, $37 PT on Sohu.com

In a report published Wednesday, Piper Jaffray & Co. reiterated its Neutral rating and $37.00 price target on Sohu.com

. Piper Jaffray noted, “We are maintaining our Neutral rating on SOHU and lowering our FY13E EPS to reflect what we believe will be a year of significant investment in online video content for the company, amid a challenging ad spending environment. Our PT remains $37, based on 12.2x CY13E EPS (up from 11x previously), a 20% discount to our 15% LT earnings growth rate assumption. The modest narrowing of our P/E discount to our LT growth rate assumption acknowledges Sohu's traction in broadening its online video content library, evidenced by hits like The Voice of China, yet underscores our continued earnings visibility concerns. We would look to become more constructive on the stock once we gain more visibility on the outlook for brand ad spending, as well as on spending levels for online video content into FY13.” Sohu.com closed on Monday at $47.34.