|Yahoo! Seen With Potential Gains Of More Than 20% |
Kate DuBose Tomassi, 01.06.06, 3:11 PM ET
NEW YORK - Goldman Sachs analyst Anthony Noto lifted earnings estimates for Internet bellwether Yahoo! and raised the stock's "implied value" to approximately $50.
"Yahoo! (nasdaq: YHOO - news - people ) remains the broadest beneficiary of the global Internet secular growth," Noto wrote in a client note issued Thursday.
The research analyst raised the 2006 and 2007 earnings-per-share estimates to 85 cents and $1.05, respectively, from 79 cents and 92 cents.
Noto cited several factors including continued market share gains in branded advertising, 12 million paying subscribers "which are poised to grow given the recently signed Verizon (nyse: VZ - news - people ) and BellSouth (nyse: BLS - news - people ) access deals," and the development of new entertainment services.
"We continue to advise investors to buy Yahoo! shares as we see more than 20% appreciation potential to our new implied value of approximately $50," the analyst said.
Noto also said he expects Yahoo!'s fourth-quarter search-related revenue to grow 13% from a year-ago, "which is still below the potential 20% to 30% quarter-over-quarter net revenue forecast for Google (nasdaq: GOOG - news - people )."