BofA Cuts Target on Groupon to $11 On The Heels of Earnings

Bank of America lowered the price objective on Groupon GRPN from $13 to $11 Friday morning following a disappointing earnings report Thursday after the close. Paul Bieber, analyst at Bank of America, believes “Street EBITDA estimates are likely to come down by ~25-30%.” The $11 price objective is based on “16x EBITDA plus ~$1.00 cash per share.” Bieber believes the Groupon turnaround, “may take longer than expected by the Street” given “N.A. local billings growth decelerated 1,100bps YoY to 2% YoY due to tough comps.” Shares are currently trading at $9.04, down 12 percent from Thursday's closing price, and well below Bieber's price objective.