Priceline Analyst Roundup
Shares of Priceline (NASDAQ: PCLN) fell 2.1 percent Thursday after the company disappointed investors with forward guidance. Revenue and income, however, were better than expected. Below is a summary of analyst commentary following the announcement.
- Jefferies - Reiterate Buy and $1,500 Price Target
Jefferies liked Priceline’s earnings report and commented on especially strong air and rental car results. The report also pointed out that first quarter margins were boosted because the company moved advertising spending back to the second quarter. The $1,500 model was derived at with a 10-year DCF model assuming an 11 percent cost of capital and four percent growth rate.
- Cantor Fitzgerald - Reiterate Buy, Raises PT from $1,400 to $1,410
Naved Khan of Cantor Fitzgerald believes that Priceline’s guidance was conservative and that Kayak’s expansion in Europe will drive additional market share gains. Although the price target increased just $10, Khan raised his expectations for the quarter from $1.79 billion in gross profit to $1.85 billion in gross profit.
- Deutsche Bank - Reiterate Buy; Lower Price Target From $1,425 to $1,300
Although first quarter earnings were better than Deutsche Bank projected, the firm is lowering its price target on Priceline because it does not see any short-term catalyst to boost shares. The valuation is based on 25 times forward earnings.
- Pacific Crest - Reiterate Outperform; Lower Price Target From $1,580 to $1,475
In his research report, Chad Bartley claims that Priceline is the best positioned online travel agency and believes that the company is a bargain at 19 times earnings. The $1,475 price target is 24 times Bartley’s expected 2015 EPS forecast of $61.58.
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