Deutsche Bank upgraded Yahoo! (YHOO ) to buy from market perform, and raised its guidance.
Analyst Jeetil Patel say Yahoo! is continuing its strong quarterly earnings per share performance. He says he's optimistic on the company as it diversifies into the Access & Premium service arena; he also sees a potential revenue/EBITDA upside. Patel raised his $156 million 2002 EBITDA estimate to $195 million, and upped the $934 million revenue estimate to $943 million. Patel also raised the $239 million 2003 EBITDA estimate to $280.6 million, and hiked the $1.09 billion revenue estimate to $1.11 billion.
Pael says Yahoo! appears to be gaining share within the online advertising market. He expects the core ad business to demonstrate growth beginning in the first quarter. Yahoo!'s only blemish, Patel says, is SBC Communications' digital subscriber line access deal with Yahoo! will now launch late in the fourth quarter, and ramp up in the first half of 2003. He has a $13 target.