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Piper Jaffray upgraded Ask Jeeves (ASKJ
) to outperform from market perform.
Analyst Safa Rashtchy says Ask Jeeves has gained a strong negotiating position vis-a-vis paid search providers. He says the acquisition of Interactive Search Holdings is likely to introduce a number of new initiatives. He notes Ask Jeeves has strong momentum in traffic, and says 2005 estimates are very likely to increase.
Rashtchy raised the $40 target to $45 based on shares trading at 28 times his 2005 estimated EBITDA. He says he would buy the stock ahead of its first-quarter earnings release Tuesday. He sees additional upside to a Mar. 4 pre-release, as his analysis of search traffic suggests that Ask Jeeves, with 19% sequential growth from the fourth quarter, grew faster than Yahoo's 13%.