UPDATE 1-Pacific Growth raises Bankrate to buy, shares rise
(Changes source, adds details, share movement)
May 29 (Reuters) - Pacific Growth Equities upgraded online consumer-banking marketplace Bankrate Inc (RATE.O: Quote, Profile, Research) to "buy" from "hold," citing higher anticipated demand for advertising services from major banks, sending its shares up over 5 percent.
In a note dated May 29, analyst Yun Kim said due to write-downs anticipated from bad debt from credit cards and home loans, major banks are likely to increase deposits in order to shore up their cash reserves.
Kim added the banks would increase advertising activities to attract deposits, which would benefit Bankrate, as it is the only established website for consumer finance.
Pacific Growth, which has a fair value of $60 on the company, said the strength of the deposits business would offset any volatility from its lead generation business.
The shares of the company rose to $51.99 during intra-day trading, after opening at $49.12. Bankrate was trading at $51.17 during morning trade on Nasdaq. (Reporting by Abhishek Chanda in Bangalore; Editing by Jarshad Kakkrakandy)
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