ValueClick Rallies; Citi Backs Off Sell Rating

ValueClick (VCLK) shares are getting a boost toady from Citigroup analyst Mark Mahaney, who lifted his rating on the stock to Hold from Sell, while maintaining his $12 price target. The stock closed yesterday at $9.21.

Mahaney notes that the stock has dropped more than 30% over the last month due to competitive and possibly structural factors highlighted by weak Q3 results. “Now we believe that much of the risk implied in our prior Sell call is reflected in VCLK’s current valuation,” he writes. Mahaney says the stock is close to recent historic lows, and he says the company should benefit from a cyclical recovery in advertising. He’s not quite bullish, though, noting among other things that he still has long-term concerns about increasing competition in display ads from Google and Yahoo, and a weak outlook for the comparison shopping segment.

Nonetheless, the rating change is having an effect: VCLK is up 33 cents, or 3.6%, to $9.54.