Priceline: Oppenheimer Is Throwing Out Fat Stacks (A Price Target Of $1380, To Be Exact)

Priceline Group Inc PCLN jumped nearly 8.5 percent on Thursday following earnings. Looking at the quarter, however, analysts at Oppenheimer believe it is just the start of a prolonged move higher. Oppenheimer is hiking its price target to $1,380, an $80 increase and just above Priceline’s 52-week high.

Oppenheimer is not concerned with Priceline’s below-consensus guidance, as the analysts said that Priceline has a history of conservative guidance. Despite this, Oppenheimer outlined four factors that will push Priceline higher:

1. Management’s “execution prowess.”
2. Continued share gains.
3. Growth in direct traffic.
4. “Strong underlying macro” environment for travel.

Priceline will also buy back $3 billion in shares, though the company only holds $1.2 billion in cash in the U.S. The price target of $1,380 reflects a valuation of 20x FY16 EPS estimates, in the middle of the company’s historic 15-25x range.

Priceline is indicated to open flat Friday morning around $1,218.