Evercore ISI analyst Ken Sena reiterated a Hold rating and lowered his price target on The Priceline Group (NASDAQ: PCLN) to $1,260.00 (from $1,320.00) following results and weak guidance today.

Sena commented,"Our Hold rating balances PCLN's scale and executional track-record against our concerns that many of its relied-upon marketing channels (e.g., Search / Meta) are moving further down the booking funnel while branded (and many independent) hotel customers are making a stronger push towards “book direct,” which together over time we see as weighing on bookings growth, take-rate, and marketing leverage. As for the quarter, however, evidence and / or timing of these trends was less clear, as a better first quarter married a weaker 2Q guide, thanks to a later-than-expected phasing of branded spend and non-ad opex investment, an earlier 1Q Easter holiday, and the June booking / travel effects of the Euro Cup / earlier Ramadan. The net effect of these items is such that, while our estimates are being reduced consistent with management commentary, we do suspect the softer 2Q guide to be largely timing-related given that 1Q room night growth, take-rate, and performance-based marketing leverage were all better than we had expected."

For 2Q, they are lowering adj. EBITDA 12% to $823mm (34% of revenue and +2% y/y) on both higher performance and brand advertising costs, albeit partially due to the timing of Easter and the new Booking.com TV ad campaign launching in the US (which they quantify as a combined ~$70mm of adj. EBITDA impact). Flowing this through the remainder of the year, FY2016 adj. EBITDA comes down 3% to $4.23bn (14% y/y and 42% of revenue), on higher ad-related expenses as both 2Q/2016 top-line estimates (where they estimate bookings growth of 18% / 19%, respectively) remain largely unchanged.

For an analyst ratings summary and ratings history on The Priceline Group click here. For more ratings news on The Priceline Group click here.

Shares of The Priceline Group closed at $1354.64 yesterday.