Standard & Poor’s analyst Scott Kessler today cut his rating on Akamai (AKAM) to Sell from Hold, after a 43% rally in the stock over the last 7 weeks. He contends the stock is now overvalued. “AKAM has appealing businesses and assets, but we note its recent expensive efforts to expand capabilities and add to its management team,” he writes. “Although we believe such investments make sense, they make nearer-term execution more challenging, in our view. Moreover, the recent stock appreciation and premium valuation multiples strongly suggest to us that expectations are quite elevated.”
He keeps his $40 target price.
AKAM is down $2.25, or 4.3%, to $50.16.
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