Yahoo! (YHOO) Undervalued Despite New IRS Spin-Off Uncertainty, Cantor Fitzgerald Says

Cantor Fitzgerald analyst Youssef Squali weighed in on Yahoo! (NASDAQ: YHOO) today after commentary from the IRS's Office of Associate Chief Counsel late afternoon yesterday regarding changes to the tax treatment of certain spinoffs raised a cloud of uncertainty around Yahoo!’s plans to hold a tax-free spinoff of its shares in Alibaba (NYSE: BABA).

"This uncertainty pressured the stock shortly before the close yesterday, but we reiterate our BUY rating on the shares," Squali said. "An analysis of varying tax treatments of SpinCo yields ~$16/share negative impact under a worst case scenario relative to our $60 fair value. At $41/share, we find the stock compelling on DCF and SOP bases."

For an analyst ratings summary and ratings history on Yahoo! click here. For more ratings news on Yahoo! click here.

Shares of Yahoo! closed at $40.98 yesterday.

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