4 Ways AOL Rewards Shareholders This Year (Or Doesn't)
On Wednesday, Jefferies issued a company note on AOL, Inc. (NYSE: AOL) after the company posted fourth quarter revenue of $710 million, which fell short of analyst estimates of $721 million, and earnings per share of $0.92 which beat estimates of $0.72.
Currently Jefferies rates AOL as a Buy and lowered its price target from $70 to $67.
Analysts Brian Pitz, Brian Fitzgerald, Sachin Khattar, Timothy O'Shea and Corey Werbelow gave two scenarios in the report showing the upside and downside potential for investing in AOL.
Upside:
1. AOL achieves over double digit organic growth next year from re-acceleration from Platform.
2. Network revenues continue to grow and scale.
3. The company is able to increase APRU for current access customers.
4. 2015 OIBDA: $540M; Target Multiple: 11.0x; Target Price: $74.
Downside:
1. Organic growth on the Advertising platform doesn't achieve industry level growth.
2. Access churn starts to tick up. The rate has consistently decreased from 3 percent during the first quarter of 2010 to 1.3 percent by the end of fourth quarter of 2014.
3. AOL is unable to increasingly diversify away from non-subscriber traffic.
4. 2012 OIBDA: $416M; Target Multiple: 6.0x; Target Price: $31.
AOL is down 0.55 percent on Thursday morning.
Latest Ratings for AOL
Feb 2015 | Deutsche Bank | Maintains | Buy | |
Feb 2015 | ||||
Feb 2015 | CRT Capital | Maintains | Buy |
View More Analyst Ratings for AOL
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