Juno jumps as analyst doubles price target

Juno Online Services Inc. (Nasdaq: JWEB) burst ahead 90 percent Tuesday, after PaineWebber doubled its price target to $120. Juno unveiled plans to give away free Internet access Monday.

Shares were up 26 to 55, up considerably since Juno beat estimates in its last quarter, but still at only still at half the $120 price target set by PaineWebber, one of the underwriters for Juno's June IPO.

In a report which reiterated the firm's "buy" rating on Juno, analyst Jim Preissler said Juno was on to something big with free access.

"Juno could convert about 1.3 million free email customers to free-ISP subs over the next quarter or so, making Juno potentially the second largest dial-up Internet access provider and the largest free ISP, ahead of NetZero (Nasdaq: NZRO) and AltaVista," he said.

Juno's latest move positions it as the leading dial-up provider behind only AOL (Nasdaq: AOL), making its current market cap of about $1.1 billion, a substantial undervaluation for the company on a relative and fundamental basis, said Preissler.

The company, which began as a free e-mail company, is now offering a plan to give away services including e-mail with file attachments, will be offered to consumers who fill out a questionnaire and view advertisements tailored to their responses. Juno also announced plans to launch an aggressive ad campaign next year designed to boost its subscriber base.