CIBC World Upgrades DoubleClick to 'Sector Outperform'

Analyst Michael Galant cites discounted valuation for the Internet advertising firm

CIBC World upgraded DoubleClick (DCLK ) to sector outperform from sector underperform.

Analyst Michael Gallant says the DART Motif, DoubleClick's rich-media offering that was released in November, should help to stabilize pricing in the technology business, and enable the Internet advertiser to better participate in online advertising's expected growth spurt. He notes Motif's stronger value proposition in the rich-media space should lead to significantly higher average pricing.

Gallant says that at least in the near term, Motif should allay his longer-term concerns over DoubleClick's core advertising serving business. He says shares trade at a discount to peers on a p-e and enterprise-value-to-EBITDA multiples; the shares' valuation doesn't reflect the potential of the Motif offering, he says.

Gallant raised the 2004 EBITDA estimate by 15%, and hiked the earnings per share estimate by 23%. He set a $12 price target.

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