JP Morgan Cuts InfoSpace to Neutral
JP Morgan downgraded InfoSpace (INSP ) to neutral from overweight.
Analyst Imran Khan says the downgrade is based on valuation. He says since the beginning of June, InfoSpace shares are up about 34%, vs. S&P 500 which is up about 1%. He says he doesn't expect signficant upward revision to his 2005 earnings per share estimate -- as such, he's concerned that the current valuation may not be sustainable.
Khan says that considering longer term challenges associated with the story, believes multiple expansion is unlikely and feels the shares are likely to continue to trade in line with the broader Internet group. He believes the company will comfortably meet his 24 cents third-quarter EPS and $60.4 million revenue estimates.
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