Market Overview

MKM Partners: Priceline Has Strong Fundamentals, But Wait For Bookings Growth, Better PE Ratio

Share:
MKM Partners: Priceline Has Strong Fundamentals, But Wait For Bookings Growth, Better PE Ratio
Related PCLN
Travel Stocks And The Tourism Industry: Investing As The Market Boom Continues
A Peek Into The Markets: U.S. Stock Futures Flat Ahead Of GDP Report

The start of a new era for Priceline Group Inc (NASDAQ: PCLN) is in sight ahead of the company’s fourth-quarter earnings. The online travel agency will change its name to Booking Holdings and trade under the new ticker symbol BKNG beginning Tuesday.

Ahead of the earnings report, MKM Partners said it views consensus estimates for Priceline as accurate.  

The Analyst

MKM Partners analyst Rob Sanderson maintains a Neutral rating on Priceline with a $1,850 price target.

The Thesis

“We think that PCLN is a dominant winner in a large and important internet vertical, but remain on the sidelines, with the stock at the midpoint of its post-recession valuation range and bookings growth at all-time lows and likely to decrease in our view,” Sanderson said in a Monday note. 

Bookings growth could continue to be pressured based on reports from two meta-search providers that spending from Priceline decreased by 10 to 15 percent in the fourth quarter, the analyst said. 

This move is seen as positive in long term, but the lower allocation to performance channels will be deflationary in the short term, Sanderson said. 

“We are not concerned with the fundaments of the business. We do see some cyclical tightness on supply, particularly in the U.S., which is a smaller, but growing market for the overall company."

Consensus estimates are reasonable, Sanderson said, adding that he does not favor the stock setup ahead of earnings, preferring to wait for greater visibility on a rebound in bookings growth.

Price Action

Priceline shares were down 0.2 percent at $1,903.25 Monday afternoon. 

Related Links: 

Trip Canceled: MKM Partners Downgrades Priceline On Near-Term Concerns

Blockchain Technology Is About To Disrupt Travel, But Wall Street Is Oblivious

Latest Ratings for PCLN

DateFirmActionFromTo
Feb 2018Deutsche BankMaintainsHoldHold
Jan 2018Wells FargoMaintainsMarket PerformMarket Perform
Dec 2017MKM PartnersDowngradesBuyNeutral

View More Analyst Ratings for PCLN
View the Latest Analyst Ratings

Posted-In: MKM Partners Rob SandersonAnalyst Color Price Target Reiteration Travel Analyst Ratings General Best of Benzinga

 

Related Articles (PCLN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
LXFTKeyBancDowngrades0.0
CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Height Securities: The Clock Is Ticking For Big Pharma As Congressional Spending Cuts Loom

Vetr Crowd Downgrades Visa