SunTrust Remains Bullish On Yahoo, Company 'Delivers On Promise'

Yahoo! Inc. YHOO stated in its quarterly results on Tuesday that its 384 million shares of Alibaba Group Holding Ltd BABA will be spun-off tax-free in the fourth quarter 2015, avoiding a $16 billion tax liability.

Robert Peck of SunTrust Robinson Humphrey commented in a note on Wednesday that Yahoo's spin-off of the 15.4 percent stake of Alibaba it owns is a “positive.”

Shares are Buy rated with a price target raised to $61 from a previous $57.

Peck also notes that Yahoo purchased $1.8 billion in stock; total from Alibaba proceeds now stands at approximately $3 billion out of the $4 billion “promised” and that the share count is down 13 percent from the first quarter 2013.

Peck also highlights the fact that the company's Chief Financial Officer Ken Goldman stated it remains “open minded” on ways to unlock value in Yahoo! Japan.

Looking forward to 2015, Peck highlights the company's strategy to focus its efforts to Core growth while trimming 15 percent of its workforce that can boost its EBITDA by more than 20 percent.