UBS upgrades Yahoo & Google

UBS upgrades Yahoo (YHOO) to buy from neutral with a $41 target, citing valuation made more attractive by "unfounded" search pricing concerns, solid fundamentals, and near-term catalysts. The broker expects YHOO to aggressively expand its Content Match product to compete with Google's (GOOG) AdSense, sees continued strength in branded advertising, expects new distribution and content partnerships, and a ramp in international growth. UBS also upgrades GOOG to neutral from sell on growth in Google.com sites and slower than expected hiring and capex. It says Google.com strength trumps other concerns and shares are fairly valued. UBS has a $190 target.