Yahoo’s Rating Cut Over High-Priced Unit

Schwab Soundview analyst Jordan Rohan cut his rating on Yahoo Inc. to “neutral” from “outperform” out of concern that Yahoo Japan was overpriced.

Trading at 87 times earnings, excluding certain costs, Yahoo Japan is the world’s most expensive Web stock, Rohan said. Yahoo owns 34% of Yahoo Japan, and it could suffer if shares of the Japanese unit tumble, he said. Yahoo shares fell $1.22 to $48.77 on Nasdaq.

Sunnyvale, Calif.-based Yahoo reports first-quarter earnings today.