This Day On The Street
Continue to site
ADVERTISEMENT
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

Priceline Surges: What Wall Street Thinks

NEW YORK ( TheStreet) -- Priceline.com (PCLN - Get Report) shares are surging this morning, gaining 6.1% to $990.58 after the online travel company reported second-quarter results that blew away Wall Street's expectations.

Norwalk, CT.-based Priceline reported second-quarter earnings of $9.70 a share on $1.68 billion in revenue, an increase of 37.8% fa year earlier, as travel bookings rose 38%. Analysts were looking for a profit of $9.36 per share on $1.66 billion in sales.

For the third-quarter, Priceline said it expects total gross booking to show a an increase of between 27% and 34%, or 25%-32% on a local currency basis. The company expects revenue to rise between 23% and 30% year-over-year, with Adjusted EBITDA coming in between $990 million and $1.055 billion. It expects Non-GAAP earnings to be between $15.30 and $16.30 per share, slightly below analysts' forecasts.

As Priceline shares "negotiate" towards $1,000 (something that was mentioned as a possibility last year), several analysts on Wall Street are raising their price targets significantly on the Internet giant.

Here's what they had to say.

JPMorgan analyst Doug Anmuth (Overweight, $1,130 PT)

"We believe Priceline continues to gain share across Int'l markets and is also making good progress in the U.S. despite elevated levels of marketing spend across all the OTAs. 2Q EBITDA margins of 44.9% came in ahead of plan even with the inclusion of Kayak and management guided to ~250 bps of Y/Y deleverage in 3Q, which was better than expected. We are encouraged by Priceline's ability to continue to gain share in a challenging environment and we believe Y/Y margin pressures should ease some in 2H13 as Priceline laps heavier spending. We reiterate our Overweight rating & our PT goes to $1,130 from $1,040."

Deutsche Bank analyst Ross Sandler (Buy, $1,120 PT)

"Priceline reported gross profit and EPS 3% above our estimates, fueled again by strong growth in international hotel. More importantly, the 3Q13 guidance implies an improving trajectory for EBITDA margin, which could approach flat Y/Y in the quarter for the first time in a year, and would help fuel multiple expansion. PCLN is executing better than most companies in the broader Internet sector, and its ~30% EPS growth vs. a 18x P/E, remains one of the most attractive risk/rewards. We have increased our 2014 EPS by 3%."

Benchmark analyst Daniel Kurnos (Overweight, $1,100 PT)

"3Q guidance again called for a moderation in growth, but mostly matched consensus at the high end, implying upside to 3Q numbers given Priceline's historically conservative outlooks. With Booking.com making headway domestically, international growth remaining elevated despite macro pressures and Kayak set to be rolled out on a larger scale, we believe Priceline will be able to maintain its operating momentum."

Cantor Fitzgerald analyst Naved Khan (Buy, $1,050 PT)

"Priceline posted impressive 2Q results that easily topped Street expectations on strong growth in bookings and room nights and better margins. While relative stability in the company's core European market and strength in AsiaPac continues to power international bookings, the company also likely gained ground in the US, benefiting from increased TV ads and Expedia's mis-execution on TripAdvisor, in our view. We believe that Priceline's market share gains will continue given its best-in-class hotel inventory, while the likely deployment of Kayak in more international geographies should open further avenues for growth over the next 12-18 months."

-- Written by Chris Ciaccia in New York

>Contact by Email.

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
PCLN $1,181.09 1.20%
AAPL $129.99 -0.42%
FB $80.72 0.53%
GOOG $538.38 0.82%
TSLA $248.37 -0.43%

Markets

DOW 18,011.19 -29.18 -0.16%
S&P 500 2,107.04 -4.69 -0.22%
NASDAQ 5,072.4780 -10.4510 -0.21%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs