Analysts Have Conflicting Views on the Future of Ctrip.com Following 86 Research Note

Shares of Ctrip.com International

are down Friday following a research note by 86 Research from Thursday morning and the subsequent downgrade from CLSA this morning. CLSA's Elinor Leung lowered her investment rating on Ctrip to Underperform -- the equivalent of a sell rating -- and set a $43.50 price target. Leung attributed the downgrade to margins which could possibly drop from 25 to 20 percent. Although the CLSA analyst said she expects fourth-quarter results to be “robust,” Leung warned of risks heading into 2014. Getting back to 86 Research's note from early Thursday, the firm noted the CEO of Ctrip told employees that the strategy for calendar year 2014 will be “zero margin.” 86 Research sees Ctrip's operating margin moving below the 20-percent range, but said hitting that zero mark is unlikely. Despite both the research note and the subsequent downgrade from CLSA, Deutsche Bank remains bullish on Ctrip. The firm's Vivian Hao maintained a Buy rating in a research note issued Friday morning. It is important to note, however, Hao reduced her price target on Ctrip from $65 to $56. Hao had this to say about Ctrip: “Ctrip is marching into more sophisticated and under-penetrated travel categories, including local attraction tickets, car rental, high-end outbound travel and cruise vacations. We expect the emerging dominance in these new verticals as a true differentiating factor for the company in the long run.” At the time of this writing, Ctrip is currently trading at $38.74, down more than 3 percent for the session. The stock has fallen from a weekly high of $46.96 on Wednesday.