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Yahoo! rises on upgrade
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January 4, 2000: 11:50 a.m. ET
Internet portal to benefit from sell-off of lackluster performers, says analyst
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NEW YORK (CNNfn) - Yahoo! Inc.’s stock price should reach $600 per share this year as the company benefits from a "flight-to-quality” scenario among high-value technology shares, said Schroder and Co. technology analyst Arthur Newman on Tuesday.
The forecast sent the Internet portal’s already high-flying shares soaring Tuesday, rising as much as 25 at one point to 500-1/8, a new 52-week high. The stock was up 17-1/2, or 4 percent, at 492-1/2 in midday trading.
Yahoo! has been enjoying the limelight in recent weeks, first with Standard & Poor’s announcement that it was adding the company to its prestigious 500 index, and later by unveiling that its 1999 online sales surpassed 1998’s levels by almost five times.
All that good news has propelled the Santa Clara, Calif.-based company’s stock to record heights. Since October, the company’s shares have gained almost fourfold, rising as high as 477 from the 170-range. On Monday, Yahoo! (YHOO) shares surged 42-5/16, or almost 10 percent, to 475.
Newman boosted his 12-month price target on the stock because of the company’s success with its e-commerce endeavors and because of its brand-name success among Web users -- something that has made the company an Internet mainstay.
That will likely make it an attractive investment as other, lesser-known Internet companies fail to produce appropriate earnings and name-brand recognition -- something that will lead to a general sell-off in technology and Internet-related shares, he said.
"It’s a nervous environment for Internet stocks and people are piling into market leaders,” Newman said. "Yahoo! is one of those market leaders, which bodes very well for its stock going forward.”
Newman’s target increase is the second in less than a month. In early December, he raised his target price on Yahoo! to 350 from 225. "Obviously with where it’s trading it deserved another look,” he said. He still rates Yahoo! stock an "outperform.” 
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