Yahoo Upgraded To Buy On Alibaba Ties

Yahoo Inc. was upgraded to buy from neutral at Bank of America Merrill Lynch on Friday, according to a note issued to clients Friday morning. While Yahoo's U.S. advertising share is expected to continue to fall to an estimated 5.6% in 2015 from an estimated 6.2% this year, the company is positioned to benefit from its stake in Alibaba Group and the associated tax upside potential, the analysts said. Despite selling part of its stake in Alibaba in September, Yahoo still owns 384 million shares in the Chinese e-commerce giant, currently worth about $42 billion. Bank of America raised its price target on Yahoo to $62 from $55 and said recent positives include returning capital to shareholders through buybacks, core business optimism about monthly active user growth and appreciation of Alibaba's stock, up 60% since pricing at $68 in its September initial public offering. Shares of Yahoo were up 1.5% to $51.18 in premarket trade.