LinkedIn IPO connecting with big banks

Plenty of friends already. At least four big banks picked up coverage of LinkedIn yesterday, all of them involved in the social network’s IPO, and all of them bullish on the shares. “We believe LinkedIn could transform the hiring industry through viral growth of its already massive, socially-connected platform,” wrote UBS to its clients. “Rapid, accelerating top-line growth suggests market validation for the company’s three business lines: Hiring Solutions, Marketing Solutions and Premium Subscriptions.” UBS expects the company to post profits of $0.36 a share in 2012, and $0.54 a share in 2013.

Similarly, Morgan Stanley wrote, “LinkedIn is becoming the transformative standard for online recruiting of professionals. Its disruptive business model should drive meaningful penetration of a $52-billion addressable market in talent recruiting and online advertising.”Morgan sees profits of $0.05 in 2012, and $0.60 in 2013.

Bank of America described LinkedIn as a play on “several positive Internet industry growth trends including: 1) increasing consumer use of social networking; 2) increasing enterprise use of the Internet for targeted recruiting; 3) greater advertiser acceptance of social media ad formats and demand for targeted advertising.” It is forecasting an even greater $0.18 and $0.74 in profits for 2011 and 2012, respectively.

And finally, JP Morgan wasn’t about to miss the bandwagon. It concluded, “We believe LinkedIn is disrupting both the online and offline job recruitment markets, and deeper corporate penetration and increasing member engagement will drive strong results over the next few years.”

LinkedIn (LNKD : NYSE : US$85.56), Net Change: 9.18, % Change: 12.02%, Volume: 2,880,753

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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