Brean Reiterates Buy On Group, Sees 'International Changes As Another Sign Of Maturity'

Shares of Groupon fell more than two percent on Tuesday after the company announced a restructuring of its international organization which will consist of the elimination of roughly 1,100 jobs and an end to its operations in seven countries. Tom Forte of Brean Capital commented in a note on Wednesday that Groupon's restructuring is an indication of its "maturation" and was a "wise decision" by management to cease operations in countries where it could not generate an appropriate return on investment. Forte pointed out that Groupon has already been active in restructuring its international operations. The company divested a majority interest in its South Korean operation, TMON, back in May. The company also secured an investment for its operations in India in early August while also exiting Turkey and Greece a few weeks later. "We expect the company to perform more effectively from an operational standpoint because of the decision," Forte wrote. "We recommend investors purchase shares at current levels." Groupon did not comment on its sales or EBITDA guidance in its restructuring announcement. Forte is adjusting his 2015 and 2016 revenue estimates to $3.108 billion and $3.431 billion from a previous estimate of $3.15 billion and $3.50 billion, respectively. The analyst also lowered his adjusted EBITDA estimate to $279 million and $309 million from $290 million and $326 million, respectively. Shares remain Buy rated with an unchanged $8 price target.