UBS Maintains Sell on Groupon (GRPN)

UBS today maintained a Sell rating on Groupon, Inc. (NASDAQ: GRPN) with a modified price target of $6.00 (from $4.70). Despite improvements, analyst Eric J. Sheridan continues to see high costs with little upside to estimates.

"We increase our estimates and price target to reflect our view of signs of stability within the overall North American business for billings/revenue, particularly as it relates to Groupon's traction on mobile and the pivot toward "pull" (and less reliance on e-mail marketing for deals). Despite this trend, we maintain our Sell rating for many of the same reasons that we highlighted in our Initiation," said Sheridan.

"We believe that to achieve this stability, Groupon will incur additional re-marketing expenses to stimulate growth in the near to medium term. In addition to cost headwinds, we are also concerned by a) lack of a permanent CEO; b) increasingly difficult North America first-party (1P) comps; c) little to no upside on margins in the near term; d) a long road ahead to repair the International business; and d) recent outperformance of the shares," he added.

For an analyst ratings summary and ratings history on Groupon, Inc. (NASDAQ: GRPN) click here. For more ratings news on Groupon, Inc. click here.

Shares of Groupon, Inc. closed at $8.53 yesterday.

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