Back in April 24/7 Wall St. looked into an analyst report that argued for Priceline to reach $1500. Argus was the firm on the call.
The firm believes that strong fourth-quarter results eased investor worries that foreign-exchange headwinds would slow growth in international bookings. In the first quarter of 2015, international bookings are projected to increase 17% to 24% in constant currencies.
Priceline’s leading position in the global online travel market, history of positive earnings surprises and exposure to the growing Chinese market warrant a multiple near the top of the historical range, according to Argus. In view of the large untapped market for online bookings, the firm expects the shares’ forward multiple to move higher.
One important point that Argus noted in its report was that Priceline is willing to sacrifice near-term margins in order to grow over the next several years. Considering the company’s strong margins, healthy cash balance and rapid growth, the firm considers this a wise decision.
Looking farther ahead, Argus expects revenue to increase approximately 14% in 2015 to $9.6 billion. In 2016, driven by strong growth in bookings, revenue is expected to rise approximately 15% to $11 billion. Despite weak foreign currencies, the firm expects higher volume and modestly higher prices, helped by economic recovery in Europe.
Since the Argus report was released shares have gained close to 7%. Without considering the impact that earnings will have on Thursday it appears Argus is right on track.
Shares of Priceline were up 0.4% at $1268.68 on a 52-week trading range of $990.69 to $1329.90. The stock has a consensus analyst price target of $1360.09.
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.