On Tuesday, Benchmark analysts reiterated their Buy rating for IAC/InterActiveCorp (NASDAQ:IAC) with a steadfast price target of $105.00, representing significant upside from the current price of $39.99. According to InvestingPro data, analyst targets range from $54 to $105, with the stock currently trading near its 52-week low.
The firm's analysis follows IAC's announcement on Monday that it will proceed with the Angi spinoff in the second quarter, despite initial skepticism about the plan. Additionally, the company revealed a significant leadership shift: Joey Levin will step down as CEO after a decade to assume the role of Executive Chairman at Angi, while continuing to advise IAC.
Levin's transition mirrors a historical pattern within IAC, reminiscent of the period preceding his CEO appointment in 2015 when Barry Diller, IAC's Executive Chairman, temporarily reassumed leadership. Benchmark's assessment, informed by an understanding of IAC's operations and recent checks, suggests that this latest development is consistent with the company's past strategies, although they acknowledge the potential for unforeseen changes.
The decision for a leadership change comes at a time when IAC's stock has been underperforming, with InvestingPro data showing a 16.87% decline over the past year and a 14.75% drop in the last six months. Despite challenges, the company maintains a FAIR financial health score and operates with moderate debt levels.
Levin has faced criticism for certain decisions, and the upcoming Angi spinoff provides a clear point of transition. This move is expected to allow Diller to engage directly with the investment community, possibly fostering a more candid dialogue and positively influencing IAC's standing.Get access to 10+ additional InvestingPro Tips and comprehensive financial analysis through the Pro Research Report, available exclusively on InvestingPro.
Benchmark's commentary underscores their anticipation of a continued dialogue with Diller, which they believe will benefit IAC. They expect the messaging to remain largely unchanged but anticipate that direct communication from Diller may lead to a more transparent exchange with investors.
In other recent news, IAC has announced a strategic plan to spin off its entire stake in Angi, a platform for home services. This move is expected to provide capital reallocation and management focus, potentially leading to future mergers and acquisitions.
Media mogul Barry Diller is set to play a more active role in the company, with IAC's CFO & COO Christopher Halpin and Chief Legal Officer Kendall Handler now reporting directly to him. Citi analyst Ygal Arounian has highlighted this shift, noting the potential for greater capital flexibility and M&A activities.
Simultaneously, Angi's shares surged following the announcement, with the separation expected to allow both IAC and Angi to focus on their respective growth opportunities. The completion of the spin-off is anticipated in the first half of 2025.
Meanwhile, Match Group (NASDAQ:MTCH) has initiated a quarterly dividend program and a new $1.5 billion share buyback authorization. The company anticipates continuing this quarterly dividend, subject to market conditions and Board approval.
Piper Sandler has downgraded IAC's rating to neutral and reduced its price target to $54, while TD (TSX:TD) Cowen revised its price target for IAC to $77 from the previous $82, maintaining a Buy rating.
IAC's subsidiary, Dotdash Meredith (NYSE:MDP) Inc., has successfully amended its credit agreement with JPMorgan Chase (NYSE:JPM) Bank, leading to a reduction in interest rates for its term loans.
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