Yahoo Earnings Miss Gets A Pass, According to BMO Capital

Yahoo YHOO shares have been steadily selling off since the company announced a disappointing second quarter.

BMO Capital analyst Daniel Salmon commented on the report. Despite top and bottom line misses, Salmon noted a silver lining: Yahoo was able to negotiate down the number of shares it must sell during the Alibaba BABA IPO.

“The company will get a pass on this as investor focus is still primarily on the value of Alibaba – next quarter post Alibaba IPO –will be a different story.”

BMO maintained its Market Perform rating and $36 on Yahoo. This price target is based on 5.9 times core EBITDA (not including Alibaba).

Shares of Yahoo were last trading at $34.70, down 2.5 percent from Tuesday's close.