RBC Analyst: Priceline Might Miss Q4 Street View

Priceline Group Inc PCLN may miss Wall Street's expectations when it posts fourth-quarter results on February 19, an analyst said Monday.

RBC's Mark S. Mahaney, who believes foreign exchange woes could cause the online travel company to miss the current consensus view, cut his price target on the company 7 percent to $1,300, maintaining an Outperform rating.

Priceline was up more than 1 percent recently at $1,034.41.

First-quarter Street estimates "also look aggressive," Mahaney said, although recent results from Expedia Inc. EXPE, which said Friday that fourth-quarter bookings increased 24 percent, are a "modest positive."

Priceline in November forecast fourth-quarter adjusted earnings of $9.40 and $10.10 a share, on gross bookings growth of 8 percent to 15 percent.

Wall Street expects fourth-quarter adjusted earnings of $10.09 a share.

But Mahaney sees profits coming in for the recent period at just $9.92 a share, and figures the company's margins will continue a long-term narrowing trend because of marketing costs and a shift to emerging markets.

Mahaney also cut his 2015 revenue outlook by 6 percent, citing foreign exchange headwinds.

Nineteen of 23 analysts following Priceline maintain Buy ratings on the company, according to Thomson/First Call.