Editors' pick: Originally published Nov. 7.
Priceline's (PCLN) third-quarter results will detail whether the European travel scene has been affected one way or the other by Brexit, as well as what overall travel trends there are.
"Our analysis shows that PCLN keeps gaining [market] share and is well positioned to deliver strong bookings and rev[enue] growth despite soft global travel trends," Jefferies analysts led by Brian Fitzgerald wrote in a note to clients. "Growing scale and leverage in the model help offset margin pressure from soft variable marketing ROI." Jefferies has a buy rating and a $1,700 price target on Priceline shares.
Priceline reports third-quarter earnings after the close of trading on November 7.
Despite being based in the U.S., Priceline is particularly sensitive to the European travel market, due to the popularity of its Booking.com subsidiary on the continent. As such, investors will be looking to see whether desktop traffic declines in the first half of the year to Booking.com have turned around.
Shares are trading at roughly 20 times forward earnings, so it's unlikely that there is meaningful multiple expansion Pacific Crest Securities analyst Brad Erickson wrote to investors, but any dip would be worth buying.
"[W]ith the stocktrading at 19.2x our out-year EPS estimate (versus an historical peak of 20x) and just over 20x after adjusting the multiple for the commensurate historical average SBC contribution to earnings, we would wait for a better entry pointbefore adding to positions," Erickson wrote in an investor note.
Analysts surveyed by Yahoo! Finance expect the company to earn cents a share on $xx billion in revenues.