By David Berman
LinkedIn (NYSE:LNKD) bounced nearly 12% Tuesday after a number of analysts released upbeat assessments on the stock, which debuted in May following a successful initial public offering. The only problem? Three of the analysts weighing in on the stock hail from Bank of America (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MS) – the company’s top underwriters.
Investors don’t seem to see much of a conflict here, or maybe they don’t want to see one. However, it is very unusual to see research panning a company that has been underwritten by an analyst’s employer. According to Bloomberg News, JPMorgan expects LinkedIn will rise to $85 (U.S.) over the next 18 months, while Bank of America has a price target of $92 and Morgan Stanley has a target of $88.
With LinkedIn’s jump to $85, though, those targets have more or less been met. Are upgrades in the works? Perhaps investors are more interested in the thoughts of another analyst, Brian Pitz at Morgan Stanley, who initiated coverage on the stock with a “buy” recommendation and a target price of $90.
“LinkedIn could transform the hiring industry through viral growth of its already massive, socially connected platform,” Mr. Pitz said in his note, according to Bloomberg. “The size and attractive demographics of the users are a primary, fundamental competitive advantage for the company and it represents a significant barrier to entry for the competition.”
LinkedIn has had a volatile ride since it began trading in May. The stock opened at $45, surged to a high of $122 and then subsided to a recent intraday low of $60.14.