Yahoo! (YHOO) Stock Slides on Ratings Downgrade
NEW YORK (TheStreet) -- Shares of Yahoo! (YHOO) are declining 0.32% to $37.62 on Monday morning trading after SunTrust Robinson Humphrey cut its rating on the stock to "neutral" from "buy."
The firm reduced its price target on shares of the Sunnyvale, CA-based technology giant to $42 from $44.
Yahoo!'s sale of its core business should generate about $6 billion, but it comes with risk as investors might "sell the news," SunTrust contended in a note cited by Barron's.
The sale could come with higher contingencies due to recent disclosures, and the liquidation of investments such as Yahoo! Japan and its Alibaba (BABA) stake will likely be lengthy and complicated, the firm explained.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C-.
Yahoo's! strengths such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins are countered by 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
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 article's author.