Oppenheimer Reiterates Outperform on Ctrip.com (CTRP) Ahead of 2Q Results
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Oppenheimer reiterated an Outperform rating and $55.00 price target on Ctrip.com (NASDAQ: CTRP) ahead of the company's 2Q earnings report. Oppenheimer is expecting CTRP to report solid results and believes that S&M will offer the most opportunity for a 2Q upside after analyzing the revenue and S&M growth spread between 2Q and 1Q.
Analyst Jed Kelly commented, "We attribute CTRP's recent 10% appreciation to solid China consumer Internet earnings and investors expecting upside to 2Q margins. A stable travel environment suggests CTRP will likely beat Street's revenue/margin estimates, with sales & marketing offering the most opportunity for upside. However, with margin expansion as the main near-term catalyst, increasing competition from sub-scale players, and QUNR's ongoing China Southern dispute, could produce cautious commentary around 3Q profit, thus causing near-term volatility in shares, despite a potential 2Q EBIT beat, in our view. We believe CTRP is well positioned to leverage China's transition to a consumption economy by consolidating its growing online travel market, and would take advantage of any near-term weakness to accumulate shares. We maintain our DCF-based $55 price target on higher outer year opex leverage."
Shares of Ctrip.com closed at $46.46 yesterday.
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