Sberbank CIB cuts target for Yandex ADR to $48.80, still Buy view

MOSCOW, Nov 12 (PRIME) -- Russia’s Sberbank CIB has cut the target price of American depositary receipts (ADRs) of Internet company Yandex by 4% to U.S. $48.80 due to a negative foreign exchange effect, but has reiterated the Buy recommendation, the investment company said on Monday in a research note.

“We consider Yandex to be in its best ever fundamental shape, with improved visibility over profitability in the taxi segment, which could make plans for an IPO more viable, and the monetization of initiatives such as Zen, an algorithmic news feed, Yandex.Auto, an automotive multimedia system, and Yandex.Station, a smart speaker, and the multimedia ecosystem surrounding it. We think the market should slowly but surely start to price this in, resulting in value appreciation for Yandex,” the analysts said.

“We consider Yandex to be an attractive investment opportunity given the ripening of new verticals, as well as the prospects implied by the Yandex ecosystem. We cut our target price by 4% to $48.80 per share on a negative foreign exchange effect, though this is partially offset by the upgrade to our Yandex.Taxi valuation. Our bull case valuation provides 25% upside to our target price, while the bear case implies 12% downside risk.”

Yandex’s ADRs closed at $28.21 on November 9 in New York.

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