Analyst Cuts Estimates on Priceline, TripAdvisor Ahead Of Q1

In a report published Monday, Evercore ISI analysts maintained a Hold rating on The Priceline Group Inc.

and TripAdvisor Inc.

, while reducing their estimates ahead of the first quarter. They mentioned, however, that both the companies appeared "well positioned to claim a piece of the growing vacation rental market." The analysts express their optimism regarding both the companies being able to cater to large demand pools, especially given the overall trend away from a subscription-based industry to a pay-for-performance one. However, "performance itself is still a function of selection, where localized supply-demand characteristics favor more scaled VR players," the analysts added. In the report Evercore ISI noted that about two-thirds of the vacation rental (VR) market was FRBO, or For-Rent-by-Owner, which is an "inherently tougher market to penetrate where technology is lacking and owners are more loathe to tripping commission fees as owners essentially manage the front desk." The 2015 EPS estimate for Priceline was reduced from $4.01 to $3.96 to reflect currency headwinds mounting again. The 2015 EPS estimate for TripAdvisor was lowered from $56.74 to $56.03 to reflect higher front-loaded marketing effort, greater seasonality from their vacation rental businesses and the recent acquisitions of Viator and thefork.com.