S&P Picks and Pans: Google, TD AmeriTrade, MGM, Vimpelcom

Analyst opinions on stocks making headlines Wednesday

S&P REITERATES HOLD OPINION ON SHARES OF GOOGLE INC.

GOOG; $512.44

On its corporate blog late yesterday, Google's YouTube unit says it has started to work with select partners to offer new video advertising. Semi-transparent and sometimes dynamic ads have started to appear in the bottom portions of some videos. The ads are displayed about 15 seconds after the videos begin and disappear about 10 seconds later, unless users click on them. We think this type of overlay ad is a pretty decent initial solution. But we still think Google will face challenges in fully monetizing YouTube, partly due to questionable content and quality of some videos. /S.Kessler

S&P REITERATES BUY OPINION ON SHARES OF TD AMERITRADE

AMTD; $16.35

An unconfirmed report in the Wall Street Journal says the company is in the midst of talks with competitor E*Trade Financial (ETFC; $15.57) about a possible business combination. We have long expected a move of this nature, and believe it could result in numerous cost synergies, allowing the combined company to become a market leader in the discount broker space. We would not speculate on the terms of such a deal, however, considering the strong management teams at both companies and the major stake in the company held by TD Bank (TD), but have a positive view of industry consolidation. /M.Albrecht

S&P REITERATES HOLD OPINION ON SHARES OF MGM MIRAGE

MGM; $81.85

MGM shares are over 10% higher this morning after the company announced a strategic relationship with Dubai World. Under the terms of the deal, Dubai will buy a 50% joint venture interest in MGM's City Center development, and also acquire a significant minority stake in MGM itself. Although half of the 28.4 million shares to be acquired will be sold directly by MGM, the remainder are to be acquired through a tender offer at $84 a share. Based on a still below peer EV/EBITDA multiple of 15X, we are raising our 12-month target price by $2 to $85, and keeping our hold recommendation. /R.Mathis

S&P REITERATES HOLD OPINION ON AMERICAN DEPOSITARY SHARES OF VIMPELCOM

VIP; $21.34

We see Vimpelcom's ADS-to-common share ratio change to one-to-five, effective yesterday, improving market liquidity for its ADSs. Operationally, we expect strong industry trends in the Russian mobile market, with higher average revenue per subscriber and increasing minutes of use, outweighing weakness in the Ukraine on heavy price discounting amid increased competition. Vimpelcom recently approved a dividend of 32.4 cents per new ADS, representing a 40% payout ratio and 1.6% yield. We adjust our 2007 EPS estimate to $1.20 from $6.00 and our 12-month target price to $22 from $110. /A.Bensinger