AOL Fast-Breaks Better Than UConn

The company's run-up was helped by a price-target boost from PaineWebber.
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SAN FRANCISCO -- Name the most exciting news item of late. (1)

UConn's

upset of

Duke

in the

NCAA Tournament

finals; (2) the

Federal Reserve

meeting taking place today; or (3) the big move in

America Online

(AOL)

.

The third response is surely our choice, particularly after

PaineWebber

raised the bar on AOL, reiterating its buy rating on the stock and upping its 12-month price target to 215 from 125. AOL was recently trading up 10 1/4, or 8%, at 142 5/8.

In its report, PaineWebber notes that AOL reaches over 50% of all U.S. online households and that both subscriber growth and international expansion have been solid. AOL has made smart strategic acquisitions, the report states, and the addition of

Netscape

staff improves a "solid management team."

As for valuation, PaineWebber notes that there are 70 million households with cable and 30 million online households. If all of the cable households go online and AOL were to maintain its 50% penetration rate, it estimates that the 35 million subscribers would be worth around $187 per share. Add in the AOL network of properties, which includes Netscape's enterprise software business and Netscape's Netcenter, and you have a share price of $215, or a market cap of $230 billion.

In the News

Splits have been good news for many tech stocks, and

AboveNet Communications

(ABOV)

is no exception. A provider of high-maintenance Internet connectivity solutions, AboveNet has traded to a new high following the announcement of a 2-for-1 split. The stock has lately gained 20 1/2, or 25%, to 101 3/8.

Shares of

National Discount Brokerage

(NDB)

are trading lower after the company announced earnings this morning for its third quarter ended Feb. 28. NDB posted earnings of 58 cents a share, up from 42 cents in its second quarter. There was no consensus estimate from

First Call

. The company noted that new active accounts in its online brokerage rose 38% and fueled revenue growth.

NDB was trading down 3 3/16, or 10%, at 30 5/16 after gaining 6 3/4 points on Monday ahead of the earnings numbers.

Shares of

Ameritrade

(AMTD) - Get Report

, which rose nearly 8 on Monday, were down 2 13/16, or 4%, at 63 11/16.

Siebert Financial

(SIEB) - Get Report

was trading down 2 3/8, or 9%, at 25 1/2.

Shares of

Sapient

(SAPE)

are trading sharply higher today after the company announced last night that it was acquiring

Adjacency

, an Internet consulting firm, in a stock transaction. Sapient was recently trading up 5 3/4, or 9%, at 69 3/4.

Priceline.com

(PCLN:Nasdaq) is the latest IPO to watch, and based on recent Net-related debuts, it should be trading far above the 16 level where it was priced on Monday. Priceline.com allows consumers to bid on airline tickets and hotel rooms. The companies activities ahead of the offering drew the attention of

TSC

last

week.