In a research report issued today, Piper Jaffray analyst Gene Munster reiterated an Overweight rating on shares of SINA Corp (NASDAQ:SINA), while slightly raising the price target to $56 (from $55), after the Chinese online media company reported earnings and revenues that both exceeded estimates. The company reported third quarter net income of $9.8 million, or 39 cents per share, topping analysts’ 21 cents per share expectations.
Munster commented, “We believe shares of SINA remain attractive on a sum of the parts basis. Thematically, our thesis remains the same: the stock trades around the market value of Sina’s stake in WB plus cash, thus the company is getting no credit for the core portal business or its investment portfolio. Based on management commentary, we expect the portal business to remain challenged in the near-term, but continue to view CEO Charles Chao’s personal investment in the company as a sign of confidence in the value of the entity.”
The analyst explained his new price target, noting, “Our Q3 updated sum-ofthe-parts assumes the following: $0.65 PF EPS for the core business and we apply a 4x multiple to that EPS (unchanged), net cash of $1.08 billion (updated for Q3 report), a discounted investment portfolio value of $500 million (unchanged), and the current market value of Weibo of $3.532 billion up from $2.705 billion in our last valuation. These assets yield rounded values of $3 per share, $17, $8, and $29 respectively for a total of a $56 sum-of-the-parts vs our prior $55. The increase is due almost entirely due to the increase in the value of WB over the past quarter, partially offset by a higher share count.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 24.4% and a 69.4% success rate. Munster has a -1.1% average return when recommending SINA, and is ranked #1 out of 3855 analysts.
Out of the 8 analysts polled by TipRanks, 5 rate Sina stock a Buy, while 3 rate the stock a Hold. With a return potential of 4%, the stock’s consensus target price stands at $54.14.