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Citi Equity Research on Wednesday lowered Yahoo! Inc.'s (NASDAQ: YHOO) price target from $60 to $56 due to the recent selloff of shares of Alibaba Group Holding Ltd (NYSE: BABA). Citi maintained its Buy rating for Yahoo.

Analyst Mark May wrote, "We continue to view YHOO as a positive risk reward as the current valuation assumes that BABA's current equity price ($90/BABA share) plus that Yahoo's stake (the SpinCo) trades at a 10% discount to BABA (worth $32/YHOO share) and that core Yahoo! is worth 2x forward EBITDA and 4x FCF using our below-consensus estimates ($2/YHOO share)."

Citi expects Yahoo to report 2015 revenue of $4.26 billion and 2015 EBITDA of $1.04 billion, both below consensus estimates. However with Yahoo's strong cash position combined with numerous growth opportunities, Yahoo is still expected to provide a nice return to investors.

Shares of Yahoo closed Wednesday at $44.04.

Latest Ratings for YHOO

Oct 2016JefferiesDowngradesBuyHold
Oct 2016NeedhamDowngradesBuyHold
Oct 2016MKM PartnersMaintainsBuy

View More Analyst Ratings for YHOO
View the Latest Analyst Ratings

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Citi Mark MayAnalyst Color Price Target Analyst Ratings


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