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The Sell Side Reacts To Yelp's Q2 Results

The Sell Side Reacts To Yelp's Q2 Results - Yelp Inc. NYSE:YELP

Yelp Inc YELP 12.56% announced its second quarter results and provided upbeat outlook for the full year.

Following the results, several brokerages commented about the results and forecast. There is a similarity on two counts. One is the local advertising and ARPU, which were better than the estimated levels. Another one is the increase in their price objective on shares.

However, a few brokerages revised their price target lower than the current market price due to concern on sustained growth ahead of the year 2017.

At time of writing, shares of Yelp traded up by $4.10, or 12.56 percent, to $36.74.

  • Credit Suisse maintained an Outperform rating on shares and lifted the price target from $46 to $50. Local advertising and ARPU were better than its expectations.
  • Citi kept its Neutral rating while boosting price objective from $31 to $35.
  • Barclays maintained its Equal-Weight rating and increased the price target from $25 to $30 citing improving local ad revenue growth.
  • Morgan Stanley maintained Equal-Weight rating and boosted its price tag from $26 to $29. The brokerage sees enhanced ad targeting and servicing to fuel increased earnings power. However, it has concerns on sustained growth.
  • Deutsche Bank maintained its Buy rating and boosted its price target from $33 to $41. The brokerage sees further upside potential to consensus estimates.
  • Cantor Fitzgerald also maintained its Buy rating and increased its price objective from $38 to $42. The brokerage sees improving ad environment and several smart moves following a number of execution mishaps in the last few years.
  • Axiom upgraded Yelp to Buy from Hold and set a price target of $44. The brokerage cited lifting of outlook and the outperformance on advertising estimates for two straight quarters following a challenging 2015.

Image credit: Nan Palmero, Flickr

DateFirmActionFromTo
Aug 2016Mizuho SecuritiesUpgradesNeutralBuy
Aug 2016AxiomUpgradesHoldBuy
Aug 2016Morgan StanleyMaintainsEqual-weight

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