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Yelp upgraded by JPMorgan ahead of Q3, guidance for H2 is 'beatable'

AuthorVlad Schepkov
EditorHari G
Published 10/27/2023, 09:49 AM
© Reuters. Yelp (YELP) upgraded by JPMorgan ahead of Q3, guidance for H2 is "beatable"

Analysts at J.P. Morgan upgraded shares of Yelp (NYSE:YELP) to a Neutral rating (from Underweight) and reiterated a $39 Price Target ahead of the company's upcoming Q3 report, as they believe "Yelp should continue to outperform many of its ad peers in 2H."

In their latest note on the company, the analysts praise the company's ability to navigate "the challenging ad market better than most of its peers," as evidenced by YELP's "nine straight quarters of double-digit% revenue growth."

They expect "these trends to continue in 2H" and see "upside potential to 3Q revenue driven by resilient consumer spend," based on three signals:

  1. Snapchat's (NYSE:SNAP) recently reported major quarterly beat, "calling out strength in the restaurant vertical."
  2. "Yelp for Business app engagement trending higher through the quarter."
  3. Yelp's lower "exposure to geopolitical-related brand campaign pauses called out by META and SNAP."

The analysts further estimate that any "macro conservatism is already built into its 2H outlook," and thus see the company's 2H guidance and estimates as "beatable."

Based on the above, J.P. Morgan believes "Yelp should continue to outperform many of its ad peers," as they upgrade shares to a Neutral rating with $39 Price Target.

YELP is set to report Q3 earnings on Thursday, November 2nd, 2023. The analysts are currently expecting EPS of $0.35 on revenue of $340.6M.

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