RBC Capital Keeps Priceline (PCLN) at Outperform Following Solid Q2 Results, Outlook
RBC Capital affirms Priceline (Nasdaq: PCLN) at Outperform with a price target of $1,500 following Q2 results and guidance issued earlier Monday.
Analyst Mark Mahaney noted the following positives and negatives from the quarter:
Positives:
- The Impressive & Consistent Fundamentals…;
- Solid Unit Metrics – 29% Y/Y Room Night growth (thougha decl from 38% in ’13), 59% Y/Y Booking.com Properties growth to 525K; and
- Plausible Share Gains In Every Market
- Deceleration In International Gross Bookings And Room Night Growth – explained by lower than expected FX, Name-Your-Own-Price weakness and int’l unrest (Thailand, Ukraine);
- Marketing deleverage – continues, but believe this is a shorter-term issue and not permanent; and
Rental Car Days Decl – to 14% Y/Y growth in Q2 from 25% Y/Y in Q1.
‘14 EPS decreases 5% to $51.83. $1,500 PT is based on 22x our ’15 EPS of $66 and 16x our ’15 EBITDA of $4.3B. Given our outlook for a 3-yr EPS CAGR of approx 26%, and given the highly consistent & robust growth of PCLN, we view these multiples as very reasonable.
For an analyst ratings summary and ratings history on The Priceline Group click here. For more ratings news on The Priceline Group click here.
The Priceline Group closed at $1281.56 yesterday.