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PCLN

Priceline

$1,719.04

-5.84 (-0.34%)

, EXPE

Expedia

$119.17

-1.6 (-1.32%)

10:32
12/07/17
12/07
10:32
12/07/17
10:32

Analyst cuts Expedia, Priceline ratings with uncertainties seen persisting

Shares of Priceline (PCLN) and Expedia (EXPE) are sliding after MKM Partners analyst Rob Sanderson downgraded the stocks to Neutral, saying it will take several quarters to resolve the uncertainties surrounding the online travel sector, and that the latter still faces a "significant lower earnings outlook." SECTOR UNCERTAINTIES: In a research note to investors this morning, MKM Partners' Sanderson downgraded Priceline to Neutral from Buy and lowered his price target on the shares to $1,850 from $2,225. The analyst noted that he sees a multitude of uncertainties surrounding the online travel sector, most of which he thinks will take several quarters to resolve. While he acknowledged that Priceline's stock has underperformed since the company reported its second quarter results in early August, Sanderson told investors that he does not think the share price performance will improve meaningfully until clarity on at least a few issues is established. Additionally, the analyst is concerned by ecosystem friction and the decision to shift spending away from performance into brand advertising, where payback periods are longer and less tangible. He also worries about plans to step up investment in the vacation rentals business, deceleration in bookings growth to post-recession lows, and Street assumptions that earnings per share growth will re-accelerate in 2019 to rates higher than this year. LOWER EARNINGS OUTLOOK: Meanwhile, MKM Partners' Sanderson also downgraded Expedia to Neutral from Buy and lowered his price target on the shares to $115 from $170, citing a "significantly lower earnings outlook" for the company as well as "cyclical and structural uncertainties" for online travel agencies over the next several quarters. Nonetheless, Sanderson noted that fundamentals may not be broken longer-term. The analyst argued he is more concerned about cyclical factors over the next several quarters. Structural issues could represent a number of smaller headwinds, but each are incremental, he added, noting that while the stock is not expensive, he does not expect a recovery until clarity on multiple fronts is established. PRICE ACTION: In morning trading, shares of Priceline and Expedia have dropped about 1% each, to about $1,700 and $118.50, respectively.

PCLN

Priceline

$1,719.04

-5.84 (-0.34%)

EXPE

Expedia

$119.17

-1.6 (-1.32%)

PCLN Priceline
$1,719.04

-5.84 (-0.34%)

12/07/17
MKMP
12/07/17
DOWNGRADE
Target $1850
MKMP
Neutral
Priceline downgraded to Neutral at MKM Partners on online travel uncertainty
As reported earlier, MKM Partners analyst Rob Sanderson downgraded Priceline to Neutral from Buy and lowered his price target to $1,850 from $2,225. Sanderson says it will take several quarters to resolve the uncertainties surrounding the online travel sector, adding that while the stock price has languished since reporting Q2 results, any meaningful improvement in shares will require more visibility in the industry.
12/07/17
MKMP
12/07/17
DOWNGRADE
MKMP
Neutral
Priceline downgraded to Neutral from Buy at MKM Partners
12/06/17
MACQ
12/06/17
NO CHANGE
MACQ
Priceline unlikely to buy TripAdvisor, says Macquarie
Macquarie analyst Matthew Brooks commented on recent speculation and said Priceline (PCLN) is unlikely to buy TripAdvisor (TRIP). Brooks said TripAdvisor's bargaining power over suppliers would be lost if Priceline bought the company, Priceline has 137M reviews and the benefit of adding 570M from TripAdvisor is uncertain, a high proportion of TripAdvisor traffic is research, not purchase, and Google (GOOGL) is TripAdvisor's main competitor, making it difficult to improve earnings power under Priceline.
12/05/17
LEHM
12/05/17
UPGRADE
Target $18
LEHM
Overweight
Snap upgraded to Overweight from Equal Weight at Barclays
Barclays analyst Ross Sandler upgraded Snap (SNAP) to Overweight from Equal Weight and raised his price target for the shares to $18 from $11. The stock closed yesterday down 30c to $13.57. With the company's pricing transition in the later stages, Snap may start hitting or exceeding consensus revenue estimates and accelerating growth in 2018, Sandler tells investors in a research note. He thinks the investor narrative in 2018 can change from Facebook (FB) "is killing" Snap to "these companies can co-exist" like Priceline (PCLN) and Expedia (EXPE). Further, Sandler highlights Snap's high short interest relative to peers, especially considering its founders own around 50% of the shares. The analyst feels now is a good time to start accumulating Snap.
EXPE Expedia
$119.17

-1.6 (-1.32%)

12/07/17
MKMP
12/07/17
DOWNGRADE
Target $115
MKMP
Neutral
Expedia downgraded to Neutral at MKM Partners on lower earnings outlook
As reported earlier, MKM Partners analyst Christopher Agnew downgraded Expedia to Neutral from Buy and cut his price target to $115 from $170. Agnew cites "significantly lower earnings outlook" for the company as well as "cyclical and structural uncertainties" for online travel agencies over the next several quarters, though longer term, the analyst says fundamentals may not be broken. Agnew says the stock is not expensive at 10-times consensus EBITDA, but any recovery in stock price depends upon more clarity on "multiple fronts".
12/07/17
MKMP
12/07/17
DOWNGRADE
MKMP
Neutral
Expedia downgraded to Neutral from Buy at MKM Partners
12/05/17
12/05/17
DOWNGRADE

On The Fly: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Expedia (EXPE) downgraded to Hold from Buy at Argus with analyst John Staszak saying the rating change reflects the company's "reduced 2018 guidance and prospects for increased spending on employee compensation, technology, and marketing next year." 2. TJX (TJX) downgraded to Buy from Conviction Buy at Goldman Sachs with analyst Lindsay Drucker Mann saying she sees clearer near-term catalysts for Tapestry (TPR), which was added to the Conviction Buy List, and maintains a Buy rating on TJX given its advantaged business model and expectations for Marmaxx improvement. 3. Allegiant Travel (ALGT) downgraded to Neutral from Buy at Buckingham. 4. Madison Square Garden (MSG) downgraded to Equal Weight at Morgan Stanley with analyst Benjamin Swinburne noting the shares have outperformed the broader Media space significantly year-to-date, narrowing the stock's discount to the company's net asset value. 5. Robert Half (RHI) downgraded to Underperform from Neutral at Macquarie with analyst Hamzah Mazari citing accelerating technology risks around disruption of the accounting and office admin staffing business. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
12/05/17
ARGS
12/05/17
DOWNGRADE
ARGS
Hold
Expedia downgraded to Hold from Buy at Argus
Argus analyst John Staszak downgraded Expedia to Hold from Buy, saying the rating change reflects the company's "reduced 2018 guidance and prospects for increased spending on employee compensation, technology, and marketing next year." Staszak notes that while the investments are necessary to address competitive threats from larger firms, they may weigh on operating margins and free cash flow in the short run. The analyst also cites Expedia's slowing growth in the U.S. - a market that accounts for some 60% of the overall bookings - given that major hotels are increasingly reserving rooms through their own websites. Staszak lowers his FY17 EPS forecast to $4.50 from $5.40 and his FY18 forecast to $5.60 from $6.90.

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$57.31

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$175.00

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SON

Sonoco Products

$53.13

-0.6 (-1.12%)

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SEE

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$48.03

-0.22 (-0.46%)

, AVY

Avery Dennison

$114.28

-0.09 (-0.08%)

04:58
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HCLP

Hi-Crush Partners

$10.80

-0.1 (-0.92%)

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MET

MetLife

$52.49

-0.35 (-0.66%)

04:55
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