Shares of Web directory provider LookSmart Ltd. (Nasdaq: LOOK) gained 6 3/8 to 48 1/16 Monday after U.S. Bancorp Piper Jaffray began coverage of the stock with a “strong buy” recommendation. Analyst Safa Rashtchy set a 12-month price target for the stock at $94, based on a multiple of 48 times his calendar 2001 revenue estimate of $168 million.
“The demand for total-navigation platforms is accelerating rapidly, as Web sites are moving beyond search, and marketers are increasingly relying on ‘Web guides’ to acquire and maintain customers,” Rashtchy wrote. Recent agreements with Time Warner, Sony and Amazon.com “are the latest indications of LookSmart’s leading position,” he said.
LookSmart, he noted, is trading at a 60 percent discount to its peers, and its platform “addresses a huge market.”
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