Prudential: Yes, Hold Yahoo!

Analyst Mark Rowen recommends investors sit on the sidelines until advertisers return to the online market

Prudential maintains its hold rating on Internet portal Yahoo! (YHOO ) and set a $20 price target.

Analyst Mark Rowen says Q1 is well short of his $240 million revenue estimate and is a clear sign that advertisers are not spending online. He believes as advertisers shift spending online, Yahoo! will be a key beneficiary, however, results suggest it will be Q4 2001 at the earliest, before we see evidence of a shift. Rowen thinks Yahoo! is viewed as a strategic asset, despite the fact that its acquisition would be dilutive, and this, along with a share buyback, should mitigate a downside risk. He recommends investors sit on the sidelines until there's evidence of an online advertising pickup.

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