In a research note released this morning, Topeka Capital analyst Victor Anthony reiterated a Buy rating on Yahoo! Inc. (NASDAQ:YHOO), but lowered his price target to $47 (from $49) ahead of Yahoo’s earnings season. The new price target marks a 35% premium over the stock’s Wednesday $34.85 close.

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Anthony explained, “We remain cautiously optimistic on Yahoo! Inc. (NASDAQ:YHOO)’s core business and expect the core drivers to continue to move in the right direction. However, a full turnaround is likely years out. Capital allocation will be a key focus given the forthcoming cash haul from the Alibaba IPO”.

The analyst continued, “The market is undervaluing Yahoo!’s shares below our bear case scenario due to concerns around inefficient use of capital, concerns the IPO valuation could be lower than anticipated, concerns around slowing Alibaba growth, and the broader sell-off in Internet stocks. The former three concerns are likely to be resolved in the near-term leading to upside to the share price”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Victor Anthony currently has a one-year average return of 17.4% and a 66% success rate. Anthony has a 14.6% when recommending Yahoo! Inc. (NASDAQ:YHOO), and is ranked #118 out of 3210 analysts.

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