FBR & Co. upgraded Orbitz Worldwide, Inc. OWW from Market Perform to Outperform with a $9 price target and increased estimates in a report issued Tuesday.
Analyst Jake Fuller noted signs of momentum for the 3Q 2014 outlook with refinancing boosting free cash flow.
Fuller raised estimates for “3Q14 (revenue from $255 million to $257 million, EBITDA from $45 million to $46 million) and 2015 (revenue from $989 million to $1,006 million, EBITDA from $172 million to $175 million).”
Regarding valuation, Fuller considered the recent pullback in the stock to leave OWW at an attractive price. The $9 price target was “based on 7x our 2015E EBITDA.”
Fuller’s “concern on OWW shares has been a view that OTA share is accruing to leaders Expedia EXPE and Priceline PCLN at the expense of the long-tail players.”
The report concluded that Fuller we now sees “OWW at the top of that long-tail group as a viable number three OTA, leaving it better positioned than most to compete in an EXPE-PCLN dominated landscape.”
Orbitz Worldwide, Inc. recently traded at $7.58, up 2.16 percent.
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