Bankrate Shares Up In Spite of a Pair of Downgrades

Bankrate (RATE) shares Monday were hit by a pair of downgrades - while a third analyst came rallying the company’s defense. (And victory so far belongs to the bulls.)

Citigroup’s Mark Mahaney today cut his rating on the stock to Hold from Buy, in what was primarily a valuation call. He maintains his target price at $57, and notes that the stock had gotten with 1% of his price target. RATE shares were up 57% since the first week of December. He also notes that the company report fourth-quarter results after the close on Tuesday

Merriman Curhan Ford’s Richard Fetyko cut his rating on the stock to Neutral from Buy, likewise based on valuation. He does says that “refinancing activity and Fed rate cuts bode well for Bankrate.”

American Technology Research analyst Tim Boyd, by contrast, repeated his Buy rating on the stock today. He expects the company tomorrow to at least reiterate their current 2008 guidance. He says the company should be a major beneficiary of a pick-up in refi activity following the recent Fed rate cuts. “Our research tells us that - with a little help from the Fed - RATE is firing on all fundamental cylinders,” he writes. “The stock is breaking out to new all-time highs - in a Bear market no less - and that tells us that the bear story is broken. With 35% of the float still held short, we view it as purely a matter of time before the shorts are forced to cover en masse.”

RATE Monday is up 19 cents, at $56.69.