Credit Suisse Lower Price Target For Priceline Group Amid FX Headwinds

Credit Suisse lowered its price target for Priceline Group Inc. PCLN on Wednesday from $1600 to $1550.

Analysts led by Dean Prissman reiterated an "Outperform [rating], which is predicated on the expectation that PCLN will remain an open-ended growth story."

Regarding foreign exchange concerns, the report noted that the "US dollar has demonstrated broad-based strength," and that "(1) The magnitude of this strength (relative to the USD/EUR rate) in key seasonal travel markets, such as Southeast Asia and Brazil is less pronounced (2) We believe Booking’s US efforts continue to pick-up momentum, and are hence an offset. As such we lower our International Bookings and Adjust EBITDA estimates for 4Q14 by 500bps vs. a rate equivalent to the 700bps decline seen in the EUR/USD rate."

Prissman concluded that "through our estimate changes we decrease our DCF-derived target price to $1,550 from $1,600 previously. For our DCF, we use a WACC of 10 percent and a terminal growth expectation of 3 percent."

Priceline Group Inc recently traded at $1032.00, down 1.7 percent.