Markets & Finance

Citigroup Downgrades Yahoo! to 'Hold'

Yahoo! (YHOO) shares fell after it announced earnings of 11 cents per share, matching the consensus estimate, up from 8 cents the year before. Citigroup downgraded the stock to hold from buy on the news.

Analyst Lanny Baker says he downgrades given the recent appreciation in the stock price toward his upwardly revised $50 target; he says fundamentals appear clearly strong in 2004. Baker says fourth-quarter results exceeded top-line expectations due primarily to stronger advertising revenue, and profit margins also made impressive progress.

Baker raised his $680 million 2004 EBITDA estimate to $775 million, and sees $950 million in 2005. He sees EPS of 53 cents in 2004 and 73 cents in 2005, both 1% higher than prior estimates.

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