Markets & Finance

Citigroup Downgrades Yahoo to Hold


Citigroup downgraded Yahoo! (YHOO) to hold from buy.

Analyst Lanny Baker says his valuation discipline suggests a more neutral stance may now be warranted. He says shares, up 63% since mid-March, have surpassed his target price. While he continues to believe there's upside to second-quarter results, and he likes Yahoo's long-term business prospects, he doesn't think upside to the second quarter will be sufficient to support enough appreciation to maintain his buy rating.

Baker also notes the Microsoft search relationship is the most obvious risk over the next 12 months. He sees 33 cents 2004 EPS, and 41 cents in 2005 EPS. He raised the $33 target to $36.50.


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