UPDATE: Goldman Sachs Upgrades Ctrip.com International to Buy on Business Segment Upside

Goldman Sachs raised its rating on Ctrip.com International

from Sell to Buy and increased its price target from $15.50 to $25. Goldman Sachs commented, "We upgrade Ctrip to Buy (from Sell) as we see significant valuation upside in its business segment, and price competition in leisure is stabilizing. With its best-in-class service quality and ongoing dominance in high-end business travel, Ctrip offers the best exposure to industry profit growth, in our view. Our e-coupon concerns are subsiding as competitor eLong's operating margin nears low single digits, and our channel checks suggest industry subsidies are stabilizing. While China online travel agency (OTA) bookings are at 25% of US volumes, OTA market cap is at only 12% of the US level – and Ctrip appears best placed to reduce the valuation gap." Ctrip.com International closed at $19.54 on Friday.