Cantor Raises Yahoo! Price Target To $43 On The Heels Of Alibaba’s IPO
In a report published today, Cantor Fitzergald analyst Youssef Squali maintained a Buy rating on Yahoo! (NASDAQ:YHOO) and raised his price target to $43. The report comes ahead of the highly anticipated IPO of Alibaba.
Squali noted, “With BABA’s share price set, we are now updating our YHOO valuation to reflect this first tranche sale and YHOO’s remaining second tranche. Additionally, we continue to believe that a tax-efficient sale of the second tranche could provide as much as $10-15/sh of upside to our PT.” The analyst continued, “Yahoo! should get $9.5B in gross proceeds from selling 140M shares out of a total of 523.6M, which should yield $6.2B in net proceeds at an assumed 35% fully-taxed rate (or $6.10/sh). Last quarter, management indicated that the first tranche would be “fully taxed” and committed to returning “at least half” of the after-tax IPO proceeds to shareholders. The 35% cash tax rate was the rate applied for the Sept ’12 Alibaba share sales. However, assuming only U.S.-held shares are taxed at 35% (92M shares out of the 140M sold, with 48M held in Hong Kong), net proceeds could reach $7.3B, or $7.21/sh, using a 23.2% overall effective rate.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a total average return of 33.4% and a 83.2% success rate. Squali has a 15.4% average return when recommending YHOO, and is ranked #2 out of 3304 analysts.