Goldman Sachs reported on Tuesday that they have downgraded
internet company, IAC Interactive Corp.(
The firm announced that they have downgraded IACI from "Neutral"
to a "Sell," and have lowered its price target from $53 to $42.
This price target suggests a 8% decline from the stock's current
price of $45.50.
Analysts predict that increased buying from Ask could pressure
margins. Additionally, since AOL, Inc.(
) and Demand Media Inc. (
) had similar arbitrage goals in their third quarter, the other
companies may threaten the strategy of IACI.
An analyst commented, "we believe the risk for IAC of increasing
keyword competition or a Google policy change on arbitrage is
significant as it derives 52% of its revenue and 65% of OIBA as of
3Q from search and the comparisons of mid-to-high 40% revenue
growth for each of the past three quarters are not only difficult
but a major outlier within the overall search market growing high
teens," the analyst comments.
IAC Interactive shares were mostly flat during premarket trading
Tuesday. The stock is up 10.73% YTD.
The Bottom Line
Shares of IAC Interactive Corp. (
) have a 2.04% dividend yield, based on last night's closing stock
price of $47.17. The stock has technical support in the $42-$44
price area. If the shares can firm up, we see overhead resistance
around the $50-$51 price levels.
IAC Interactive Corp.(
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.3 out of 5 stars.
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, as well as a detailed explanation of
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