Yahoo (YHOO) Stock Receives Rating Downgrade at Pivotal Research
NEW YORK (TheStreet) -- Yahoo (YHOO) stock was downgraded to "hold" from "buy" at PivotalResearch on Monday morning.
The firm maintained a $41 price target on the Sunnyvale, CA-based technology company, known for its search, email, and news services.
The downgrade comes as Yahoo's market share of worldwide digital advertising has declined from around 20% in 2004-2006, to about 3% today, according to the analyst note.
"Potential buyers of the business undoubtedly have plans that would attempt to reverse this decline, although we think that bids will reflect more conservative (and realistic) expectations," the firm said.
Despite the downgrade, Pivotal Research continues to value the core business at $3.5 billion excluding any cash.
Yahoo is expected to deliver second quarter fiscal earnings July 18 after the market closes.
Shares of Yahoo are up by 0.82% to $38.27 in early-morning trading on Tuesday.
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 largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. 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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