Bob Peck: Continuing Exec Departures At Yahoo Put Pressure On Marissa Mayer, But Stock Still Attractive

• The share price of Yahoo! Inc. YHOO has declined 38.64 percent, year to date.
• Robert S. Peck of SunTrust Robinson Humphrey has maintained an Buy rating and price target of $40 on Yahoo.
• With increase in the departure of high profile executives, Peck believes that Marissa Mayer might be facing increasing pressure. However, the risk/reward of the stock is currently favorable.

Despite top executives leaving the company, Peck believes that there could be upside potential to the stock via “turning around the core, exploring tax-efficient monetization for the investments, and optionality around a leveraged equity shrink.”

Following the departure of CAO Aman Kothari, CMO Kathy Savitt left the company on Friday. Savitt played an “active role” in the company’s Media business, apart from the CMO responsibilities.

SVP of advertising and data platforms, Scott Burke, and EMEA head Dawn Airey are the other recent departures from Yahoo.

At her three year anniversary, Yahoo’s CEO, Marissa Mayer, has said that her strategy focuses on “people, product, and traffic,” which was then expected to lead to revenue. “However, in analyzing the metrics at the 3-year mark we think the results are mixed,” Pecks stated.

However, downside to the stock appears limited, while the risk/reward continues to be favorable. “We continue to believe the market is pricing in a full taxes on Yahoo's investments,” Peck added.