Groupon stock soars after Deutsche Bank upgrade
NEW YORK (AP) — Shares of Groupon Inc. got a boost Friday after a Deutsche Bank analyst upgraded the online deals company, saying it is likely to grow in the coming months as it works to personalize deals to existing customers and attracts new ones through its mobile app and website.
THE SPARK: Analyst Ross Sandler upgraded Groupon to "Buy" from "Hold" and raised his target price on the stock to $10 from $6. He thinks Groupon can grow its billings— a closely watched figure that shows the amount that customers spend on its deals — sharply in the next couple of years.
THE BIG PICTURE: Groupon has struggled with its stock price since going public in 2011 and fired its co-founder and CEO Andrew Mason earlier this year. Over the long-term, the company hopes to broaden its reach as an e-commerce company in the footsteps of Amazon and eBay.
THE ANALYSIS: Sandler said Groupon should be in a position to speed up growth as it boosts the number of its active subscribers by marketing and encouraging people to install its app on their mobile devices, rather than depending on those who receive emailed deals. Increased product selection and personalization should also help the company grow, he said.
""Despite some growing pains from digesting acquisitions and combining disparate systems and technologies, the company has been able to launch new channels and new product categories more successfully than most competitors in the space," Sandler wrote in a note to investors.
SHARE ACTION: Chicago-based Groupon's shares rose 91 cents, or 13.3 percent, to $7.77 in midday trading, after earlier spiking to $8.03, its highest point in 11 months. The stock bottomed out at $2.60 in mid-November, and has been mainly on the rise since then.