Yahoo! downgraded by Thomas Weisel

Thomas Weisel downgraded Yahoo, Inc. (NASDAQ: YHOO) to peer perform from outperform.

Interestingly, they still believe "Yahoo as a business has a terrific future," but the company could have a problem with earnings. Call me dense, but I thought that Yahoo!'s warning indicated that very clearly already.

However, the timeline is important too. At Weisel they're talking medium-term problems in "achieving consensus earnings expectations" -- that is, making the Street's estimates -- which might mean that Weisel doesn't trust Yahoo! to roll Panama on time.

Weisel also said that increased competition and problems on the advertising side could have an adverse effect on Yahoo!'s ability to gain market share in display advertising.

Analysts consensus now calls for Yahoo!'s Q3 revenue to increase by 23% year-over-year to $1.15 billion. Earnings per share for the quarter is estimated to be 11 cents, down from 16 cents last year.

Last I checked, around 2:30 p.m., Yahoo! shares were up 18 cents, or 0.75% to$24.30 -- so presumably the downgrade isn't flushing out any additional sellers today.