Thursday, September 6, 2012

Buy Priceline.com (PCLN), Dump TripAdvisor (TRIP), Orbitz (OWW), Expedia (EXPE) says Jeffries analyst

Travel portal Priceline.com Inc(NASDAQ:PCLN) has been rated a `Buy' by Jeffries and as the best company in the sector which can rise out the poor economic conditions, especially in the travel sector.

Tripadvisor Inc(NASDAQ:TRIP), Expedia Inc(NASDAQ:EXPE) and Orbitz Worldwide, Inc.(NYSE:OWW )have been given `Hold' ratings on the criteria that while the companies have growth opportunities, the weak global economy and other factors will limit their growth.

The Jeffries analyst Brian Fitzgerald rated the four travel agencies on Wednesday.

Priceline shares are expected to rise 24 percent over the next one year, on its strong revenue growth and international expansion.

Get Complete Analysis On The Online Travel Industry Here

For TripAdvisor, Fitzgerald said that the stock has long-term potential but may face turbulent times ahead due to the economic weakness, rising competition and lack of diversity among its customers. The company got 28 percent of its revenues from leading customers to Expedia, he said.

Last year TripAdvisor was spun-off from Expedia.

In the case of Orbitz, Fitzgerald said that the company was falling behind due to increasing competition, inspite of a large and growing online travel market.

"Relatively soft bookings and revenue growth over the last year suggest it's not currently a good buy for investors," Fitzgerald said.

Expedia Inc is the largest online travel portal in the world but due to its size the company has been slower to respond to changes in the industry. Fitzgerald said that the bookings and revenue had improved by only by a small amount.

Shares in Priceline fell $1.71 to $595.18, while that of TripAdvisor rose 75 cents to $35.40. Expedia closed at $52.10 while Orbitz edged up to $2.75.

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