Ctrip.com CTRP shares are moving lower Tuesday morning after Stifel Nicholas downgraded the stock from buy to hold.
A primary reason for the downgrade is that Air China, a major airline, said it will reduce its commission on ticketing from three to two percent. Further, analyst George Askew writes, “We believe it is likely that other Chinese airlines will follow Air China’s example, particularly the number one and two players China Southern and China Eastern… As a result we are assuming a net commission reduction to Ctrip of perhaps 0.5%.”
Stifel cut its 2014 revenue estimate by two percent and earnings estimate by three percent, to 1.13 billion and 160.5 million.
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