UPDATE: JG Capital Initiates Coverage on AOL with Neutral Rating, $40 PT on Advertising Revenue Growth Rebound

In a report published Wednesday, JG Capital initiated coverage on AOL (NYSE: AOL) with a Neutral rating and $40.00 price target.

JG Capital noted, “AOL has one of the most extensive online media portfolios in the market. AOL advertising revenues have grown for the past seven consecutive quarters, driven by mid-20% y/y growth in network revenues and mid-teens growth in domestic display revenues. We believe AOL's domestic display is slowly turning the corner as the company's devil ad formats have been gaining wider acceptance and domestic online ad spending continues to increase industry wide. AOL's advertising.com has also been developing a robust ad tech stack, which we expect to be a significant driver of profitable growth near-term. Furthermore, we think the consortium with Yahoo!, AOL and Microsoft may squeeze more yield out of inventory.”

AOL closed on Tuesday at $39.23.