Yahoo! (YHOO) Gets Price Target Hike at BMO Capital

Yahoo!'s (YHOO) stock price target was raised this morning at BMO Capital after being bought by Verizon (VZ) on Monday.
By Natalie Walters ,

NEW YORK (TheStreet) -- Shares of YAHOO! (YHOO) are up by 0.76% to $38.61 in mid-morning trading, after being acquired by Verizon (VZ) for $4.83 billion on Monday. 

In response, BMO Capital raised Yahoo!'s price target to $44 from $39 due to "a higher value for the core business," but said it sees the impact of the deal on Yahoo! as "neutral." The firm has a "market perform" rating on the stock. 

The most important question is when shareholders will receive cash, as buybacks are expected, the firm said. 

While CEO Marissa Mayer says the headcount is at 2006 levels, the firm thinks it can be reduced further. "Under VZ, we first expect further rationalization of the YHOO cost structure as operations are merged with AOL," BMO wrote.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate YAHOO INC as a Hold with a ratings score of C-. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

You can view the full analysis from the report here: YHOO

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