UPDATE: Bank of America Upgrades Ctrip.com International to Buy Following Strong 1Q13 Results

In a report published Thursday, Bank of America analyst Eddie Leung upgraded the rating on Ctrip.com International CTRP from Neutral to Buy, and raised the price target from $23.50 to $29.50. In the report, Leung noted, “We upgrade Ctrip to Buy after a strong 1Q13 and encouraging management outlook that illustrates the following trends: 1) margin stabilized after a two-year downtrend as coupon promotion impact largely factored in; 2) revenue growth picking up on back of industry recovery. Co reported 27% YoY revenue growth and 14% OM, which are materially above our estimates of 20% and 10% respectively, and indicated no margin deterioration in coming 2Q despite full-quarter impact of coupon promotion on air tickets. Coverage of coupon promotion also shows some signs of stabilization at current levels. Hence we lift 13E/ 14E OM by 2ppt/ 1ppt on steady GM and better control of marketing expenses.” Ctrip.com International closed on Wednesday at $23.80.