CITIGROUP UPGRADES VALUECLICK TO BUY FROM HOLD, HAS $30 TARGET
Citigroup analyst Mark Mahaney says he views the recent 14% drop in ValueClick (VCLK) shares as offering great entry point for core net advertising name. He says ValueClick is one of best plays on net advertising's secular growth: a broad ad play with the No. 1 independent ad network, No. 1 affiliate marketing company, No. 1 independent ad-serving company, and top comparison shopping business.
Mahaney sees signs that ValueClick's lead generation segment is stabilizing. He notes that ValueClick is in active but preliminary talks with the FTC; a conclusion may remove acquisition obstacle and stabilize market lead generation spending. He says the current valuation provides very attractive risk-reward; also, ValueClick remains an acquisition candidate.
CITIGROUP UPS TELEFONOS DE MEXICO TO BUY FROM HOLD
Telefonos de Mexico (TMX) says it will spin off its international operations. Citigroup analyst Patrick Grenham says he did not expect this, but he views it as accretive to the value as he believes TMX stock gets no credit for its international businesses at current valuations.
He thinks the new business could carry a value of $8-$10 per ADR depending on the cash given in spin off and valuations applied by the market. He values the Telmex only business at $28-$36 based on amount of debt, free cash flow yield which this biz will command in market. He notes that the biggest uncertainty in this deal will be the tax treatment of spin off in U.S. markets.
Grenham raises his $40 12-month target price to $45, however, he thinks the stock will trade up to only $40 ahead of the actual deal.
THINKEQUITY UPS TARGET FOR SUNTECH POWER HOLDINGS
ThinkEquity analyst Jonathan Hoopers says ahead of Suntech Power's (STP) third quarter earnings release today, he increased his $1.86 billion fiscal year 2008 revenue estimate to $1.98 billion, representing 46% year-over-year growth on 62% year-over-year growth in megawatts of production. He notes third quarter results were impressive.
Hoopers says STP has been one of the most active Solar PV companies in signing up new polysilicon and wafer supply contracts. While details of these contracts are not always available, he says it appears the company is intent on firming up as much supply as possible to facilitate rapid production expansion.
The analyst raises his price target to $90, 39 times his $2.30 2009 EPS estimate, a multiple more in line with the company's strong market position and growth outlook.