These 3 'Hidden' Assets Could Drive Yahoo! (YHOO) Bids Higher - SunTrust's Peck

SunTrust Robinson Humphrey analyst Bob Peck reiterated his Buy rating and boosted his price target on Yahoo! (NASDAQ: YHOO) to $44.00 (from $40.00), saying the company's three 'hidden' assets are not well understood. These assets could have material upside to bids, potentially driving them higher than the firm's $6-8B published range.

The three under-appreciated assets are:

1) Yahoo! Japan Royalties - We believe the royalty stream is very valuable, as it is in perpetuity and represents ~30% of Yahoo’s core advertising EBITDA in 2016. Investors’ concerns around transferability of this cash flow appear misplaced, according to the original publicly available Yahoo! Japan contrac.

2) IP - Yahoo has over 6k patents, which could be worth more than the $1-3B range the company has cited – further many of these patents are publicly available

3) PP&E – the company owns ~1M sq ft of building and real estate, which could be worth ~$1B.

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 $36.66 yesterday.

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