Credit: Shutterstock photoAs global markets seesaw with every headline out of Europe, Priceline (PCLN) continues to take advantage of the strong interest in travel in Europe, leaving investors with nearly 20% upside.
Cantor Fitzgerald analyst Naved Khan, who rates Priceline buy with a $1,360 price target, noted that bookings for the second quarter look like they are coming in at the high-end of guidance, which should bode well for the company.
"Our checks on global search traffic to Booking.com and other PCLN brands through Juneend, coupled with higher European hotel room rates and a robust pace of new property additions (on both hotels and vacation rentals) suggest that [Priceline's] bookings are tracking at [or] above the upper end of management's guidance and our expectations," Khan wrote in a note.
For the second quarter, Priceline expects to earn between $10.95 and $11.75 a share, with revenue up 7% year over year. Travel bookings are expected to rise 12%, or 26% when accounting for changes in foreign currencies. Year-to-date, shares of Priceline have lost 1.1%, compared to a 5.5% gain in the Nasdaq.
Analysts surveyed by Thomson Reuters expect the company to generate $2.26 billion in revenue and earn $11.95 a share.
In May, the company reported better-than-expected first quarter results, earning an adjusted $8.12 a share on $1.84 billion in revenue. Analysts surveyed by Thomson Reuters were expecting the company to earn $7.72 a share on $1.84 billion.
Since Priceline generates the majority of its sales overseas, 88% of revenue coming from its international segment, it is more exposed to exchange rates and volatile events, such as the Greek debt crisis, but that hasn't stopped Khan from suggesting that Booking.com, Priceline's main engine, is tracking ahead of his expectations.
"[Year-over-year] growth in search query interest for Booking.com improved ... through June ... based on our analysis of data from Google Trends," Khan penned in the note. "Given search's importance in Priceline's marketing channel mix, coupled with a strong secular growth trend in mobile bookings, we believe that the company is tracking at [or] above the high-end of guidance for 24% [year-over-year] growth in international bookings in [the second quarter of 2015]."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
