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Wells Fargo Makes Positive Comments on Groupon (GRPN)

January 28, 2014 9:03 AM EST Send to a Friend
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Price: $6.97 +1.16%

Rating Summary:
    8 Buy, 19 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 24 | New: 21
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Wells Fargo maintained an Outperform rating on Groupon, Inc. (NASDAQ: GRPN) with a price target of $13-$14. Analyst Trisha Dill sees a path to profitability for Groupon Goods.

"We believe the profitability (or lack thereof) of Groupon Goods is a key investor concern, but we are beginning to see a clearer path to profitability based on a number of key initiatives, including the company's acquisition of flash sale retailer ideeli, and the development of a private label division at Groupon, which we recently found in an online job posting," said Dill.

"In general, eCommerce growth has continued to significantly outpace overall retail growth, the consumer continues to look for value, and the off-price category continues to move online, which all bode well for Groupon Goods over time in our view. GRPN shares have pulled back over the past two weeks based on concerns of decelerating trends in the business and macro emerging market concerns, but we believe any short-term disruption related to Groupon's business transformation creates a buying opportunity. In our view, GRPN shares are compelling at 15.3x FY2014 EBITDA vs. the eCommerce peers at 18.4x," she added.

For an analyst ratings summary and ratings history on Groupon, Inc. click here. For more ratings news on Groupon, Inc. click here.

Shares of Groupon, Inc. closed at $10.00 yesterday.




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