Pacific Growth upgraded Yahoo (YHOO ) to overweight from equal-weight.
Analyst Derek Brown says the online media portal posted blowout first-quarter results that easily topped his aggressive forecasts, management's guidance, and consensus estimates. He notes online advertising (branded and search) is on fire, and says Yahoo is taking share.
He notes shares are trading at new 2004 and 2005 p-e ratios of 75 and 53.4, respectively. Also, Brown says while these multiples are fairly rich by most measures, he thinks investors will -- and should -- look through them and expect the stock to work higher. He raised the 53 cents 2004 earnings per share estimate to 64 cents, and upped the 72 cents 2005 estimate to 91 cents.