Yelp Inc., the service for online restaurant and local business reviews, climbed to a record after JPMorgan Chase & Co. boosted its 12-month target share price for the company by 19 percent.
The shares rose 7.9 percent to $78.42 at 4 p.m. in New York. Yelp’s market capitalization has surged more than fivefold since the San Francisco-based company’s initial public offering in March 2012.
Yelp is succeeding at getting advertisers to buy their promotions in most U.S. cities across many different industries, Kaizad Gotla, an analyst at JPMorgan, wrote today in a report. The growth could lead the stock to $89 in 12 months, compared with his earlier estimate of $75, he wrote.
“There’s significant room for strong revenue growth and margin expansion for Yelp as it remains relatively underpenetrated in local advertising,” Gotla wrote. “The pace of innovation in new advertising products is accelerating and the company is making good progress towards closing the loop for advertisers.”
The JPMorgan report comes two days after Telsey Advisory Group raised its stock price prediction on Yelp to $95 from $62 on advertising growth.
With assistance from Beth Mellor in New York. Editors: Ari Levy, Cecile Daurat. To contact the reporter on this story: Sarah Frier in San Francisco at [email protected] To contact the editor responsible for this story: Pui-Wing Tam at [email protected]