Yandex NV has the most buy ratings since 2011 and is favored over rival Google Inc. by equity analysts as the company cements its position as Russia’s most-used search engine amid rising demand for Internet advertising.
Shares of Yandex surged 16 percent yesterday to $24.94 in New York, the biggest jump in almost two years. The Hague-based Yandex has an average analyst score of 4.6, with 5 indicating a buy and 1 a sell, according to data compiled by Bloomberg. Mountain View, California-based Google, the world’s dominant search tool, scores 4.3. The Bloomberg Russia-US Equity Index rose a fourth day yesterday, adding 0.7 percent.
Yandex, which has 62 percent of the Russian search market to Google’s 26 percent, said yesterday that 2013 sales will grow as much as 35 percent, from a previous forecast of up to 32 percent. Higher revenue from text and display ads fueled a 42 percent surge in Yandex profit in 2012, when online advertising posted the fastest growth in the ad market, according to data from the Association of Communication Agencies of Russia.
“There are very few companies in the world that can compete with Google, and Yandex is one of them and the only one in Europe,” Konstantin Belov, an analyst at UralSib Financial Corp. in Moscow who has rated Yandex a buy since the end of 2011, said by phone yesterday. “It will further benefit from growing demand for online advertising.”
Of the 20 analysts covering Yandex 80 percent recommend buying the stock, with the average 12-month target price of $30.49 implying a 22 percent jump from current levels, data compiled by Bloomberg show. That compares with the 11 percent increase expected in Google’s shares, according to the average of 36 analysts’ target prices. A total of 70 percent of 46 analysts covering Google recommend buying it.
Yandex has won buy ratings from firms including JPMorgan Chase & Co., Jefferies Group LLC, Piper Jaffray Cos, Barclays Plc and Deutsche Bank AG, data compiled by Bloomberg show.
The company posted a 79 percent increase in first-quarter profit as net income climbed to 2.25 billion rubles ($72 million) from 1.26 billion rubles a year earlier, the company said in a statement yesterday. Sales grew 36 percent to 8 billion rubles, while the adjusted margin on earnings before interest, taxes, depreciation and amortization was 43.8 percent.
Yandex said yesterday that it has purchased 2 million shares since March, when it announced a buyback program for as many as 12 million shares to support stock prices.
The company revised its sales forecast for 2013 even as Russian policy makers cut the growth estimate for 2013 to 2.4 percent. The economy expanded 2.1 percent in the fourth quarter, the least since a contraction in 2009.
Web advertising in Russia increased 35 percent last year to $1.87 billion, according to the Association of Communication Agencies of Russia, or AKAR.