Benchmark Lowering Price Target On Aol (AOL)

Benchmark Capital is lowering its price target on shares of AOL (NYSE: AOL) on the news the company has acquired The Huffington Post today. It cut the price target to $24, and is keeping its Hold rating.

In a note to clients, Benchmark writes, "AOL announced another acquisition, by far the largest since Tim Armstrong became CEO. AOL will acquire The Huffington Post (HuffPo) for $315 million, including $300 million in cash. HuffPo will add minimal cash flow this year but possibly $30 million next year. As such, the transaction is dilutive and somewhat speculative. Bottom-line: the potential AOL turn-around is requiring more cash than we anticipated, thereby eroding value support. We lower our target price $1 to $24 per share. We maintain a Hold rating."

Shares of AOL are down 23 cents to $21.71, a loss of just over 1% on almost 2.5 million shares.