) to peer perform from outperform.
Analyst Jake Fuller says the downgrade is based on three factors: 1) decelerating travel growth (share shift, lower mark-ups, and increased competition); 2) InterActive is in a transition period (integration of travel assets, competitors ramping); 3) valuation is O.K., but not great.
Fuller says his 17 cents first-quarter estimate is above the Street's 16 cents, reflecting his view that InterActive hasn't ramped marketing as much as the Street had expected. He notes even with the first-quarter upside, he's below the Street for the year (90 cents, vs. 93 cents) due to decelerating growth and increased competition. He upped the 85 cents 2004 earnings per share estimate to 90 cents, and set a $1.10 2005 estimate.