NEW YORK (AP) — Priceline.com Inc. is gaining slightly Friday before the opening bell after an analyst lifted the stock to “Buy,” saying a recent pullback and growing business in the U.S. and Asia have provided a good opportunity for investors.
Brian Nowak, an analyst with Nomura Equity Research, raised his rating from “Neutral” and his price target to $740 from $700.
While Priceline is heavily exposed to economic in weakness Europe, the company’s effort to broaden and diversify its business should lead to growth, Nowak said in a note to clients. About 65 percent of hotel bookings through Priceline will come from outside Europe, versus 42 percent previously, he said.
Priceline last month reported lower-than-expected second-quarter revenue and warned that European weakness would lead it to fall short of Wall Street’s expectations for the year. Nowak said he believes growth in Priceline’s European business next year will be the weakest since 2008.
But the analyst says Priceline’s competitive position remains strong. Even as the European business is slowing, Nowak said he expects Priceline to gain a bigger slice of Europe’s online travel market.
In other areas of the world, Priceline’s outlook is more optimistic, he said. In the U.S., he sees gains from increasing market share and heightened exposure through Google. Nowak also raised his expectations for growth in Asia, noting that Priceline is growing faster than competitors there.
In premarket trading, Priceline shares rose $8.01, or 1.3 percent, to $612.01. They peaked at $774.96 in April, their highest point since 1999. Shares have retreated since but are still up 29 percent in 2012.