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LOS ANGELES (AP) — Shares of seat-booking technology provider OpenTable Inc. fell Monday after an analyst cut his rating on the stock, saying a run-up in share prices and moderating diner and client trends means that shares are now fairly priced.
THE SPARK: Piper Jaffrey analyst Michael Olson cut his rating on OpenTable to "Neutral" from "Overweight" in a research note published Monday.
Olson said shares have run up 45 percent in the last six weeks and are now trading at 25 times fiscal 2013 earnings, which is a premium to the 20 times of peer companies.
He reset his target price to $49, up from $45 previously.
THE BIG PICTURE: OpenTable is a leading provider of online restaurant reservation booking tools. More than 25,000 restaurants use its services. The company is headquartered in San Francisco and offers service in the U.S., Canada, Germany, Japan, Mexico and Britain.
THE ANALYSIS: OpenTable's diner growth is seen moderating in the third quarter through September, to a year-over-year increase of 26 percent, down from growth of 52 percent in the third quarter of 2010, according to Olson.
He expects customers who use its Electronic Reservation Book application will increase just 2 percent compared to the second quarter, down from his previous estimate of 4 percent growth.
SHARE ACTION: Shares fell $2.28, or 4.6 percent, to $46.92 in midday trading Monday. Shares have traded in a range between $31.54 and $53.16 in the past 52 weeks.