This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Investors Should Pick Priceline in 2013: Merrill Lynch

NEW YORK ( TheStreet) -- - Priceline (PCLN - Get Report) could be a good bet for investors in 2013, according to Bank of America Merrill Lynch, which upgraded the online travel specialist to buy on Thursday.

The investment bank cited Priceline's business, ongoing strength in international markets, the potential for a modest European recovery and its recent surprise deal for Kayak (KYAK) as positives.

Set against this backdrop, BofA Merrill Lynch raised its Priceline price objective to $770 from $690.

The upgrade helped lift Priceline's stock during Thursday's trading. Shares of the Norwalk, Conn.-based firm were up 2.38% to $653.62 in early afternoon trading, easily outpacing Nasdaq's gain of 0.03%. The stock also crossed its 200-day moving average of $648.54.

"We see more near-term potential to 2013 estimates than [rival] Expedia (EXPE - Get Report)," wrote BofA Merrill Lynch analyst Justin Post, in a note released on Thursday.

For the company's current fiscal fourth quarter, BofA Merrill Lynch said it expects Priceline to report earnings of $6.68 a share, compared to Wall Street's forecast of $6.52. For fiscal 2013, the investment bank increased its Priceline earnings estimate from $38.40 to $38.67 a share and its revenue forecast from $6.31 billion to $6.36 billion. Analysts surveyed by Thomson Reuters expect earnings of $37.45 a share and revenue of $6.275 billion.

"Aided by an increasing mix of APAC (Asia Pacific), LATAM (Latin America), and's U.S. bookings, we see a company with an attractive growth profile, estimate upside potential and a reasonable multiple with room to expand," wrote Post. "If Europe were to recover in 2H, Priceline is the most exposed in our coverage group as a percentage of profit."

Clearly keen to drive both organic and inorganic growth, Priceline recently made a shock $1.8 billion move to acquire Kayak, seen as a shrewd piece of M&A that will build on its successful purchases of in 2005 and hotel reservation service Agoda in 2007.

"While [the] deal is expected to be neutral to 2013 EPS and isn't that significant (cost is around 5% of Priceline's market cap), we have a favorable view on the acquisition, with the opportunity for Priceline to build Kayak into a strategic traffic hedge to Google (GOOG - Get Report) for globally," wrote Post.

Priceline also is perfectly positioned for the mobile boom, offering investors another way to tap into the explosion in gadgets such as Apple's (AAPL - Get Report) iPad and iPhone and Google Android devices.

The company's shares have risen 34.6% over the last 12 months.

TheStreet's Ratings rates Priceline a buy.

--Written by James Rogers in New York.

>To submit a news tip, send an email to:

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
EXPE $115.77 0.00%
GOOG $693.01 0.00%
PCLN $1,343.66 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs