Ahead of the Bell: Online travel sites


NEW YORK – Orbitz Worldwide Inc. was downgraded and earnings estimates for online travel competitors Priceline.com Inc. and Expedia Inc. were cut Thursday, as analysts pointed to a weaker travel market and a stronger dollar.

Piper Jaffray analyst Michael Olson cut his rating on Orbitz to “Sell” from “Neutral,” saying travel industry fundamentals weakened in September, particularly on the domestic level.

Orbitz is more concentrated on domestic business than Expedia and Priceline, Olson wrote. He lowered his price target on the shares from $5.50 to $4.

Olson was more positive on Priceline, keeping his “Buy” rating, but lowering his share price target to $83 from $125. He believes the company has the best position of the U.S. online travel companies as the market slows, because 60 percent of its bookings are outside the U.S. and its sales model is attractive to cost-conscious consumers.

Goldman Sachs analysts Jennifer Watson and James Mitchell lowered their 2008, 2009 and 2010 earnings estimates for Priceline because of the stronger dollar and weak travel outlook.

They said Priceline’s stock price already takes into account third-quarter results that are likely to miss analyst expectations.

Piper Jaffray’s Olson kept a “Neutral” rating on Expedia while cutting his earnings estimates. He also slashed his price target on the stock from $22 to $13.50.

Expedia is improving its exposure to the European market by buying Venere, and generates a large amount of free cash flow, but will be affected by industry fundamentals, he said.

  • capetonianm

    “The Schengen area is one of Europe‚Äôs unsung triumphs: with one visa, a visitor can cross into 26 different countries”

    ……… and so can criminals of all varieties, invaders, terrorists, illegal aliens and so on.

    Far from being an ‘unsung triumph’ it’s an unmitigated disaster, having a negative impact on far more people than those who benefit from it. It threatens peace, stability, and security throughout Europe. It is a pernicious and dangerous piece of legislation and should be repealed as soon as possible.

    I travel to, from, and within Europe more than most people, and would gladly have to be subjected to passport controls and the reinstatement of borders, and on a related topic, I would like to see the legacy national currencies returning to replace the artificial political currency known as the Euro.

    To those who support Schengen, I would ask you if you would allow your neighbours free access to your home purely because they happen to be your neighbours?

    If the Schengen zone countries had been able to effectively police and control the external borders of the zone, the situation might have been different, but as things stand, and there is no prospect of change, this is nothing but an idealistic and failed project within the massive confidence trick that is the EU, perhaps the second biggest confidence trick in the history of mankind.