TripAdvisor, Pepsi Are S&P Decliners

NEW YORK ( TheStreet) -- Shares of TripAdvisor ( TRIP) and Pepsi ( PEP) were among the worst performers on the S&P 500 midday Thursday.

The index was rising 1.82 points to 1,351.78 midday Thursday.

Shares of TripAdvisor fell 16.85% to $28.56 on about three times the stock's average daily trading volume.
TripAdvisor and Pepsi were among the worst S&P 500 performers midday Thursday.

The travel company reported Thursday fourth-quarter earnings of $22 million, an increase of 19% from a year earlier. TripAdvisor's fourth-quarter earnings per share were 16 cents, up 2 cents.

The stock was downgraded Thursday to neutral by analysts at both Susquehanna and Lazard. Lazard previously rated TripAdvisor a buy; Susquehanna had a positive rating on TripAdvisor.

TripAdvisor's 2012 guidance fell below analysts' estimates.

"Due to CPC pressure and 'decluttering' efforts, TripAdvisor issued mid to high teens y/y revenue growth guidance versus Street's expectation of 21% growth," Bank of America Merrill Lynch analysts wrote in a report Thursday. "We are now modeling 2012 revenue/adjusted EBITDA of $751.2mn/$320.4mn from $763.9mn/$335.0mn. Additionally, we are lowering our 1Q12 revenue/adjusted EBITDA estimate to $169.2mn/$74.1mn from $182.4mn/$78.6mn. Although we are lowering our 2012 estimates, we are raising 2013E revenue to $912.7mn from $901.0mn."

TripAdvisor has an estimated price-to-earnings ratio for next year of 17.50; the average for travel and tourism stocks is 24.09. For comparison, Priceline.com's ( PCLN) forward P/E is 17.76 and Hertz ( HTZ) has a forward P/E of 11.72.

Of the 15 analysts who cover TripAdvisor, 11 rated it a hold. Three analysts gave the stock a buy rating and one considered it a sell. The stock has risen 13.09% year to date.

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PepsiCo

Shares of PepsiCo fell 3.82% to $64.19 on more than double the stock's average daily trading volume.

The soft drink company reported Thursday fourth-quarter earnings of $1.4 billion, or 89 cents a share, an increase from year-earlier profit of $1.36 billion, or 85 cents a share.

PepsiCo also announced Thursday that it was cutting 8,700 jobs, or 3% of its global work force, in an effort to save $1.5 billion by 2014.

"The guidance is for extra spending of $500-$600 million in 2012, slightly ahead of our $400-$500 million number," JPMorgan analysts wrote in a report Thursday. "This is to be spent 'with particular focus' in North America. Some of this spending will be offset by headcount reductions. The company is guiding for an 8,700 person reduction in headcount (3% of total company), with no more than 2,000 people in any one country. This should drive $500m in incremental productivity in 2012, 2013, and 2014."

PepsiCo has a forward P/E of 12.98; the average among soft drink companies is 25.74. For comparison, Coca-Cola ( KO) and Monster Beverage ( MNST) both have higher forward P/Es of 15.16 and 28.90, respectively.

Of the 20 analysts who cover PepsiCo, 12 rated the stock a buy. Seven of the analysts considered Pepsi a hold and one rated it a sell.

TheStreet Ratings gives Pepsico an A+ grade with a buy rating and $76.69 price target. The stock has dropped 3.8% year to date.

-- Written by Alexandra Zendrian

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