Some analysts call AOL undervalued! $135 Billion marketcap! Give us mercy!!
NEW YORK, March 30 (Reuters) - Shares of America Online Inc. jumped
more than 10 percent Tuesday on positive comments from a Wall Street analyst
and after the online giant announced an Internet commerce pact with Sun
Microsystems Inc. <SUNW.O>.
AOL's shares in early afternoon traded at 145-15/16, up 14, after touching a
new 52-week high of 149.
PaineWebber analyst James Preissler Tuesday lifted his price target for AOL to
$215 a share, from his previous target of $125. He reiterated his buy rating on
the stock.
AOL is undervalued, Preissler wrote, particularly on examination of the
potential value of the various components of the AOL, including the recently
acquired Netscape Communications Corp.
"Totaling the sum of the parts of the AOL network of properties, we arrive at a
potential worth of $215 per share, or $230 billion of market cap," he said in a
note.
"Still, we do not think we are aggressive in valuing AOL's worth. Upside to
these numbers could come from several areas, in our opinion," he added.
He also said that AOL's more than 17 million domestic subscribers, including
about one million from CompuServe, and 50 percent penetration of the online
market, could in time equal the magnitude of domestic cable television
penetration.
AOL, the world's largest Internet services company, and computer maker Sun
Microsystems Inc. also unveiled plans Tuesday to develop a unified set of
electronic-commerce products by early next year.
The alliance between the two companies, which they referred to as the
Sun-Netscape Alliance, would develop products for messaging and
collaborating through the Internet, as well as directory and security features for
safely navigating and doing business on the Web.
The companies also sketched plans to develop what they described as
packaged e-commerce software applications.
13:02 03-30-99 |
