RBC's Key's to Priceline Group's (PCLN) Quarter
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RBC Capital Analyst, Mark Mahaney, reiterated his Outperform rating on The Priceline Group (NASDAQ: PCLN) and reiterated his price target of $1,600. Keys to the quarter include:
1) Organic Growth Trends Robust – 21% Y/Y Bookings (ex-FX), 24% Y/Y Hotel Room Night, and 18% Y/Y Gross Profit (ex-FX)
2) Q3 Outlook Implies Acceleration in terms of Room Night Growth, Gross Profit, and Gross Bookings…we still see PCLN on track to deliver Room Night growth in ’16 at or above ’15
3) Less Worse Margin Trends 34% Op. Margin was down 310 bps Y/Y, and Q3 guide suggests potential for less deleverage…Performance Advertising ROI has been stable for four quarters, tho no signs of leverage.
4) Sizeable Share Repurchases & FCF Generation– Repurchased $299MM in Q2 and generated $1.1B in FCF.
5) Materially Outpaced EXPE In Room Night Growth and Bookings– Outgrew EXPE 24% vs. 12%.
6) CEO Search Still On– We estimate former CEO Jeff Boyd remains Interim CEO until year-end.
Shares of The Priceline Group closed at $1359.99 yesterday.
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Related EntitiesRBC Capital, Mark Mahaney
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