Citigroup Upgrades DoubleClick to 'Buy'

Analyst Lanny Baker says online-advertising spending could grow more than 20% in 2004, which would boost DoubleClick's margin and valuation

Citigroup upgraded DoubleClick (DCLK ) to buy from sell.

Analyst Lanny Baker tells S&P MarketScope that online-advertising expenditures could grow 20%+ in 2004, and maintain high-teens growth in 2005. Baker says an upswing in revenue should spur accelerated cash-flow growth for most online-media companies; he expects margin expansion, balance sheet improvements, and valuation gains as a result.

He says DoubleClick is one of the least expensive stocks in his coverage. He sees demand for the company's full-features, and higher-end products including Motif rich-media services, poised to improve. He notes headcount and bandwidth costs are flat to down.

Baker sees 18 cents 2003 earnings per share, and raised the 24 cents 2004 earnings per share estimate to 32 cents.

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