Match Group Rises As Jefferies Says Buy On Limited Facebook Impact

Shares of Match Group (MTCH) are on the rise after Jefferies analyst Brent Thill upgraded the stock to Buy, saying his proprietary survey shows the long-term impact of Facebook's (FB) dating foray will likely be limited. According to the data, Facebook's product will likely appeal to an older demographic rather than millennials, Thill contended.

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JEFFERIES SAYS BUY MATCH GROUP: In a research note to investors this morning, Jefferies' Thill upgraded Match Group to Buy from Hold and raised his price target on the shares to $50 from $40. Citing a survey of 600 online daters, the analyst pointed out that any Facebook impact will likely be minimal as the latter's product will likely appeal to an older demographic rather than millennials on Tinder. Only 43% of respondents said they would definitely use Facebook for dating, and 61% said it would be an additive product rather than a replacement, he added. Further, Thill noted that new Facebook product features have had a minimal impact on public competition in the past. Additionally, the analyst argued that the social media giant may find it difficult to create a one size fits all product. The portfolio approach is a big advantage for Match Group, enabling them to target different demographics and needs, he contended. 

WHAT'S NOTABLE: In conjunction with his upgrade of Match Group's shares, Jefferies' Thill raised his price target for IAC (IAC) to $200 from $175. Trading at just 12 times 2019 EBITDA and a $3B market discount to the company's ownership in Match and Angi Homeservices (ANGI), IAC's valuation looks attractive, Thill argued, calling it a top mid cap pick. The analyst reiterated a Buy rating on IAC's shares.

PRICE ACTION: In late morning trading, shares of Match Group have gained almost 3% to $42.66.


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