The firm cited the looming Alibaba IPO as a major factor in its position on Yahoo!, as the company owns a 24% stake in the Chinese business.
"We believe Alibaba should continue to deliver outsized revenue growth on the back of strong secular growth in China e-commerce," UBS wrote in a research note . The firm added Yahoo!'s core business outperformed in the first quarter and "warrants a multiple more in-line with peers."
Must Read: Warren Buffett's 10 Favorite Growth Stocks
The stock was up 3.53% to $35.19 at 11:36 a.m. on Tuesday.
Separately, TheStreet Ratings team rates YAHOO INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate YAHOO INC (YHOO) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."