Shares of Web video delivery company Akamai Technologies Inc. rose Friday after two analysts upgraded the stock based on an upbeat outlook for online commerce.
Shares rose $1.26, or 5.3 percent, to $25.03 in afternoon trading Friday. Citi Investment Research analyst Mark Mahaney upgraded Akamai to “buy” from “hold” and set a price target of $31.
He called Akamai a market leader in content delivery and said both online advertising and online sales were seen growing in the double-digit percentages in 2010. He expected Akamai to earn $1.63 per share in 2010.
“If two of Akamai’s biggest end markets can grow in the double digits in ’10, we believe variance to Street ’10 estimates is much more likely to be to the upside than downside,” he said. Mahaney also noted that the delivery of high-definition video was expected to materially boost results in 18 months to 24 months.
Oppenheimer analyst Srinivas Anantha boosted Akamai to “outperform” from “perform” and set a $30 price target.
Along with an upbeat outlook for Web video, Anantha was impressed that value-added services now made up half of Akamai’s revenue. He raised his outlook for earnings to $1.63 per share, up from $1.47 previously, and said revenue looked to grow 7 percent in 2010 to $900 million.
“Long term, we see increasing Internet video quality and proliferation of rich mobile data services as additional drivers,” Anantha wrote.
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