Analyst Upgrades: Facebook, Starz, and Yahoo!

Analysts upwardly revised their ratings on FB, STRZA, and YHOO

Dec 5, 2014 at 9:01 AM

Analysts are weighing in today on social network Facebook Inc (NASDAQ:FB), media company Starz (NASDAQ:STRZA), and Internet powerhouse Yahoo! Inc. (NASDAQ:YHOO). Here's a quick roundup of today's bullish brokerage notes on FB, STRZA, and YHOO.

FB received a "buy" initiation and $105 price target at MKM Partners. This positive analyst attention is well-deserved, considering the shares have rallied nearly 56% year-over-year-to perch at $75.24. More broadly speaking, most of the analysts covering Facebook Inc are already in the bulls' corner. In fact, 30 out of 32 brokerage firms have doled out "buy" or better ratings, compared to just two "holds" and not a single "sell." What's more, FB's consensus 12-month price target of $87.38 stands at a roughly 16% premium to current trading levels.

STRZA crashed in the final minutes of yesterday's session, following news the firm may pursue alternatives to a sale after failing to find a buyer. By Thursday's close, the stock was down 16.3% at $27.76, bringing it into the red on a year-to-date basis. This morning, however, Macquarie upgraded Starz to "outperform," while Sterne Agee reiterated its "buy" assessment, citing "expectations of modest revenue growth, high cash flow generation, equity shrink, upside to estimates and a potential modest multiple expansion as the creative cycle continues to build." Yesterday's plunge was likely music to the ears of short sellers. During the last two reporting periods, short interest on STRZA spiked more than 60%, and currently makes up 8% of the equity's float -- which would take about 12 sessions to cover, at the security's typical daily trading volume.

Finally, YHOO was raised to "buy" from "neutral" at BofA-Merrill Lynch, after a research firm yesterday predicted the company will surpass Twitter Inc's (NYSE:TWTR) share of the U.S. mobile advertising market next year. On the charts, Yahoo! Inc. has been a beast, advancing roughly 25% year-to-date to sit at $50.41. However, there are still plenty of bearish holdouts in the options pits. YHOO's 50-day put/call volume ratio of 0.32 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 70th percentile of its annual range. A capitulation among these skeptical bettors could add fuel to the equity's fire.

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