Credit Suisse Positive Coverage on Internet/Social Media (AMZN, EBAY, GOOG, FB, GRPN, YHOO)
Oct 10th 2012 8:37AM
Credit Suisse is initiating and reinstating coverage on the Internet players. The bias is positive on some and neutral on others from analyst Spencer Wang. Outperform ratings were given to Amazon.com Inc. (NASDAQ: AMZN), eBay Inc. (NASDAQ: EBAY) and Google Inc. (NASDAQ: GOOG). The Neutral ratings were given to Facebook Inc. (NASDAQ: FB), Groupon Inc. (NASDAQ: GRPN) and Yahoo! Inc. (NASDAQ: YHOO). We would note that some of the Neutral ratings have upside that is very large to the price targets.
We have offered a synopsis of each call below and shown the price target objectives, with added color if applicable.
Amazon.com Inc. (NASDAQ: AMZN) was started as Outperform with a $301 price target. The firm's thesis remains unchanged and it sees Amazon as a best-of-breed technology company that is well positioned to capitalize on the secular growth of ecommerce as a share gainer.
eBay Inc. (NASDAQ: EBAY) was started as Outperform with a target price of $47. The firm is positive on eBay's fundamentals, based on sustainable double-digit revenue growth for PayPal with expanding margins over the long run. It expects that the Marketplaces segment will continue to show further signs of stabilization.
Google Inc. (NASDAQ: GOOG) was started as Outperform with an $850 price target. The firm continues to believe that Google can grow revenue and earnings at a mid to high teens growth rate over the next five years.
Facebook Inc. (NASDAQ: FB) was started with a Neutral rating and a price target of $24 that still implies upside of about 18%. Credit Suisse actually said it continues to have a positive long-term bias on Facebook as it is positioned to capitalize on social media and gain share of the $360 billion or so of the global brand advertising market.
Groupon Inc. (NASDAQ: GRPN) was started as Neutral with a price target of $11, which is weird that it would have a Neutral rating if it implies 100% upside. Spencer Wang said that he is waiting for the company to deliver on the original strategy of transitioning away from being a more marketing-driven to being more of a technology-driven franchise, as it makes use of user behavioral data it has collected to deliver a more relevant deal experience.
Yahoo! Inc. (NASDAQ: YHOO) was started as Neutral with a $19 price target. The firm said that Yahoo! is viewed merely as a perpetual turnaround story, but it did say that downside is likely limited due to its off-balance sheet Asian assets and an undemanding valuation of its core business.
JON C. OGG