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RBC Capital’s Jordan Rohan Friday increased his price target on Yahoo (YHOO) to $34 from $31, asserting that “data points from industry contacts suggest that Yahoo’s Project Panama algorithm change on February 5 progressed fairly smoothly… across a wide sample of advertisers, we believe total spend has increased modestly from pre-to-post Panama levels.”

Ergo, Rohan raised his earnings estimates for the first half, triggering the target price increase.

Rohan says he has heard anecdotally of some advertisers with limited budget flexibility shifting some dollars to Yahoo from Google (GOOG) and MSN (MSFT).

Rohan’s 2007 forecast goes to $5.3 billion in revenue, $2.1 million in EBITDA and EPS of 71 cents; that compares to his previous estimates of $5.24 billion, $2.08 million and 70 cents. He continues to rate the stock Outperform.

Yahoo Friday was up 37 cents at $31.62. (Which suggests that maybe a teensy bit of his target price change reflected a need to either move his target - or change his rating.)

Source: Yahoo: Is Project Panama Taking Dollars from Google?