Despite a “correction” in its rating from “Buy” to “Hold” earlier this week...

Despite a “correction” in its rating from “Buy” to “Hold” earlier this week...

Published: 31 Aug 2006

Despite a “correction” in its rating from “Buy” to “Hold” earlier this week...

Despite a “correction” in its rating from “Buy” to “Hold” earlier this week, analysts believe Priceline is “well-positioned in the online travel industry and expect it to maintain the highest growth rate in the industry for the foreseeable future”.

Earlier this week, Stifel Nicolaus analyst Scott Devitt reportedly downgraded Priceline.com’s stock to “Hold” from “Buy”, based on valuation, but the analyst called the company’s last quarter “outstanding”.

He added: “It is our goal to maintain a level of discipline when recommending a security and we believe that, at $33, investors should no longer aggressively allocate new capital to Priceline.com.” Devitt, according to media, said he would be interested when the share price dropped into the upper $20s.

“We continue to believe Priceline.com is well-positioned in the online travel industry and expect it to maintain the highest growth rate in the industry for the foreseeable future.”

As per the information available, Priceline closed Wednesday at $31.26. On August 7, Priceline saw its shares skyrocket 15 percent after the company posted second-quarter earnings per share of 55 cents on sales of $308 million, beating Wall Street’s expectations.

Priceline wasn’t the only travel stock to get hammered Wednesday. Expedia dropped 1.4 percent, and online publisher Travelzoo, another solid performer this year with a 42 percent gain, dropped 11 percent.

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