Yandex: Driven by E-commerce (target price update)

We updated our model and valuation for Yandex to incorporate recent developments and guidance. Our new projections are higher on the top line and lower on EBITDA and the bottom line, mostly as a result of faster growth and larger investment in E-commerce. Despite an improved growth profile, our target price remains nearly unchanged at RUB 6,200 ($84.0) per share due to increased market risk premiums and a drawdown in peer-group relative valuation. We find recent company developments as highly positive and believe that Yandex is in the prime of its ecosystem development, with E-commerce being its major driver and Online Ads remaining the basis of financial stability. Nearest triggers for the name are a further gain of E-commerce market share and restructuring of business units post the acquisition of Uber’s stakes in Taxi MLU and SDG.