Goldman Sachs analyst Jennifer Watson slashed her price target on Orbitz from $6.80 to $2.70 this morning, based on its slow growth in comparison to Expedia and Priceline, and its heavy reliance on consumer fees. Accordingly, the stock has taken a tumble.
In a post-earnings conference call yesterday, Expedia remarked that the soft market they’d been seeing in the U.S. and U.K. ever since Lehman went bankrupt has now extended to “nearly all” geographies and products–including air, hotels and car rentals. Priceline and Orbitz share the same problem–Orbitz to the greatest extent, since its business is primarily focused on air. Travel well.
If the economy is going to slow (which it is) and the jobless rate is going rise (which it is) you can safely conclude that people will be traveling less. That’s the core idea behind the call on the online travel sites by Bank of America’s Brian Pitz and Brian Fitzgerald, who today chopped their estimates and price targets on Orbitz (OWW), Expedia (EXPE) and Priceline (PCLN).
Just in time for the busiest travel days of the year, Stifel Nicolaus analyst George Askew today turned cautious on the online travel sector. He cut his ratings on Priceline, Expedia and Orbitz to hold from buy.
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