Priceline shares up on growth expectations
NEW YORK (AP) — Shares of Priceline.com Inc. rose Wednesday on expectations that the travel website operator will continue to grow and pick up market share.
THE SPARK: Priceline's fourth-quarter profit and revenue beat average analysts' predictions, helped by a 33 percent jump in its website bookings. It also issued guidance for the first quarter that was in line with Wall Street expectations.
THE BIG PICTURE: Priceline's better-than-expected fourth-quarter results stemmed from a 40 percent jump in international bookings, boosting investor confidence that the Norwalk, Conn.-based company will continue to increase its piece of the overseas market.
That growth resulted from better-than-expected European demand, despite a tough economic environment there, along with growth in Asia and Latin America.
THE ANALYSIS: Cantor Fitzgerald analyst Naved Khan backed his "Buy" rating for the stock and boosted his price target by $50 to $800, saying that the stronger-than-expected growth in international bookings and first-quarter guidance show that the company's investments in the Asia and Latin American markets are paying off.
"While higher investments will pressure margins over the next several quarters, management's strategy makes sense to us, given the sizable opportunity for online travel in these markets," Khan wrote in a note to investors.
Benchmark analyst Daniel Kurnos also rated the company at "Buy" and boosted his price target by $50 to $800, saying it's clear that Priceline's long-term outlook hasn't changed.
THE SHARES: Up $21.80, or 3.2 percent, to $700.29 in midday trading, after peaking at $712.50 earlier in the session. Over the past 52 weeks, the company's shares have traded between $553.42 and $774.96.
Over the past year, the shares have risen about 18 percent.