Deutsche Bank Reiterates Hold Rating on NeuStar (NSR)

Deutsche Bank is out with a research report this morning, where it reiterates its Hold rating on NeuStar Inc. NSR; it has a $28.00 price target on the stock. The DB analysts cited the company's recent earnings released generally in-line with expectations when adjusted. The analysts noted that they see the $7.5 million rebate given to the NPAC as a positive sign, since the threshold for numbers in the database was met. While the Enterprise segment grew 19% in FY10, it still only accounts for 25% of revenues, the remaining Carrier segment being dominated by the fixed-price NPAC contract. As for valuation, the analysts remarked, “We adjust forward estimates to incorporate today's update. Our 12-month price target of $28 is based on our unlevered CY12 FCF estimate of $2.40 per share (up from $2.35), an EV/FCF/G multiple of 0.9x (in line with the group), and a long-term growth rate ('11-'16) of 10% net of options dilution.”