Attention Yahoo Investors: Alibaba Just Made Citi Analysts Change Their Mind About This
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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 2016||MKM Partners||Maintains||Buy|
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