Brean Murray Carret & Co. Downgrades Ctrip.com (CTRP) to Neutral; Expect Earnings Growth to Be Muted Upon Margin Contraction
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Price: $34.93 --0%
Rating Summary:
22 Buy, 11 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
Rating Summary:
22 Buy, 11 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
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Brean Murray Carret & Co. downgraded Ctrip.com (NASDAQ: CTRP) from Buy to Neutral.
Brean analyst says, "CTRP reported soft 3Q results with below expectation 4Q guidance. However, what concerned us most was that we believe CTRP is hitting a crossroad for a structural change in its business model. Its heavy off-line component (with ~6500 call center staff) starts to take a toll on its gross margin as labor cost in China has just hit an inflection point, where a multiyear increase is likely down the road. In addition, to capture the fast growing leisure segment, the company has to step up its sales and marketing expenses (with its hotel coupon program), which should further depress its operating margins. As such, we expect the company’s earnings growth will be muted in 4Q and beyond."
For an analyst ratings summary and ratings history on Ctrip.com click here. For more ratings news on Ctrip.com click here.
Shares of Ctrip.com closed at $34.27 yesterday.
Brean analyst says, "CTRP reported soft 3Q results with below expectation 4Q guidance. However, what concerned us most was that we believe CTRP is hitting a crossroad for a structural change in its business model. Its heavy off-line component (with ~6500 call center staff) starts to take a toll on its gross margin as labor cost in China has just hit an inflection point, where a multiyear increase is likely down the road. In addition, to capture the fast growing leisure segment, the company has to step up its sales and marketing expenses (with its hotel coupon program), which should further depress its operating margins. As such, we expect the company’s earnings growth will be muted in 4Q and beyond."
For an analyst ratings summary and ratings history on Ctrip.com click here. For more ratings news on Ctrip.com click here.
Shares of Ctrip.com closed at $34.27 yesterday.
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