In a report published Tuesday, SunTrust Robinson Humphrey Analyst Robert Peck maintained Neutral on Yahoo YHOO and raised the price target from $42 from $34. Yahoo's core is in the middle of a turnaround, of which investors are waiting on the results. Yahoo's assets in Asia comprise almost 90% of its valuation. Alibaba and Yahoo! Japan both performed well in 3Q13.
On Yahoo's Asian assets, Wunderleich Securities noted "Assuming the valuations above on Alibaba and taking Yahoo! Japan's market value, implies ~$30 per share of value for Yahoo!'s Asian assets. Stripping out Yahoo!'s net cash of ~$4 implies investors currently paying ~3x EBITDA for Yahoo!'s core. We are taking our target up from $34 to $42, predicated on a 5x EBITDA multiple which we think is more appropriate. We remain optimistic on Yahoo!'s efforts, but wait for more evidence of the core turn around to be more constructive and maintain our Neutral rating."
Yahoo closed on Monday at $38.22.
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