Priceline Now Expected to Return to 2012 Highs
ThinkstockPriceline.com Inc. (NASDAQ: PCLN) is rising into 2013 after having seen its shares pull back handily from highs in 2012. The culprit on Thursday is an upgrade from Bank of America/Merrill Lynch. The firm raised its rating to Buy from…
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Priceline.com Inc. (NASDAQ: PCLN) is rising into 2013 after having seen its shares pull back handily from highs in 2012. The culprit on Thursday is an upgrade from Bank of America/Merrill Lynch. The firm raised its rating to Buy from Neutral. Priceline’s price target was also raised to $770 from $690 by the firm.
BofA raised the earnings estimates from $38.40 EPS in 2013 and $44.68 in 2014 up to a higher earnings projection: $38.67 in 2013 and $45.47 in 2014. The upgrade was based upon excitement for the Kayak deal and the following:
- 1) We see more near-term upside potential to 2013 estimates than Expedia Inc. (NASDAQ: EXPE)
- 2) our updated international market segment analysis suggests still-strong growth over next three years, even with Europe decelerating and
- 3) a strong play on BofA Merrill Lynch’s expectation for a modest second half Europe recovery.
The research report also noted “somewhat stable hotel occupancy trends through November” and it said that the $/Euro has increased. BofA even noted that the Booking.com hotels are up 7% quarter over quarter versus its own 6% estimate.
If BofA is right, then Priceline could be headed back to its 52-week highs all over again. The $770 price target compares to a 52-week range of $469.28 to $774.96. Analysts in the Thomson Reuters system have a consensus price target of about $750 and the highest registered analyst price target is $838 on the stock. So BofA is calling for Priceline to challenge its 2012 highs. That is a tad more bullish than the consensus group but not by much.
Priceline shares are trading up 2.6% at $655 today. With a market cap of $32.6 billion, Priceline remains more valuable than most of the airlines combined.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
