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Yahoo! (YHOO) Upgraded To 'Outperform' By Oppenheimer, PT Raised To $27

 March 21, 2013 01:48 PM

(By Balachander) Yahoo! Inc. (NASDAQ: YHOO) shares were upgraded to "Outperform" from "Perform" and price target raised to $27 from $22 by Oppenheimer.

The brokerage cited the increase to a higher current trading value for Yahoo Japan (YJ) shares, its assumption that Alibaba will complete its IPO within the next 12 months at a $77B valuation.

Oppenheimer now estimates 2013 core EBITDA 2 percent above the Street on higher Search revenues from toolbar/application providers.

Alibaba is the leader in China's high-growth eCommerce industry, Oppenheimer noted.

"Our $77 billion valuation appears reasonable based on: 1) Alibaba's 80%+ market share of China eCommerce; 2) 43% annual revenue growth estimated '12-'15, with significant margin expansion, resulting in EBIT CAGR of 51%," the brokerage wrote in a note.

[Related -Yahoo! Inc. (NASDAQ:YHOO): What Will Drive Future Revenue For Yahoo!?]

Oppenheimer believes toolbar/application companies have shifted at least 50% of traffic away from GOOG. As a result, the brokerage increasing its '13 and '14 Search Ex-TAC revenue estimates by 8% and 11%, respectively.

The stock, which has been trading in the 52-week range of $14.59 to $23.09, traded 3.08% higher at $22.77 on Thursday.

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