2 Travel Stocks Tanking After Earnings

TRIP shares touched a fresh four-year low on missed revenue and a weak forecast

Nov 7, 2017 at 9:48 AM
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Analysts are weighing in on travel stocks Priceline Group Inc (NASDAQ:PCLN) and Tripadvisor Inc (NASDAQ:TRIP), as well as online car-shopping service TrueCar Inc (NASDAQ:TRUE). Here's a quick roundup of today's bearish brokerage notes on PCLN, TRIP, and TRUE.

Priceline Shares Tank on Disappointing Guidance

Despite the travel company's third-quarter earnings and revenue beat, Priceline stock is down 8.6% to trade at $1,740.00, after the company's fourth-quarter guidance came in below estimates. As a result, at least eight brokerage firms cut their price targets, including Deutsche Bank, to $1,825 from $2,050. Meanwhile, RBC raised its price target to $2,100 from $2,050.

Since hitting an all-time high of $2,067.99 on Aug. 8, PCLN shares have pulled back to find support from their 160-day moving average. Though still up roughly 22% year-to-date, the security could be vulnerable to additional price-target cuts and downgrades, as 15 of the 18 analysts following the stock rate it a "buy" or better with not a single "sell" in sight.

Weak Forecast Sends TripAdvisor Stock To Fresh Lows

Shares of sector peer TripAdvisor are also down this morning, last seen trading 12.7% lower at $34.51, and touched a four-year low of $ earlier, after the company's third-quarter revenue and fourth-quarter forecast missed estimates. As such, Piper Jaffray lowered its price target to $40 from $43.

TRIP shares have struggled this year, losing roughly almost 26% overall. Shorts are likely cheering today's dismal price action, as short interest accounts for 18.2% of the equity's total available float. At TRIP's average daily trading volume, it would take nine sessions to cover the 20.49 million shorted shares.

TrueCar Misses Revenue Estimates for First Time in 7 Quarters 

TrueCar stock is trading 31.8% lower at $11.15, after the company's third-quarter revenue missed estimates for the first time in seven quarters. The car sales website shares are also down thanks to a weak fourth-quarter sales forecast. In response, at least five brokerage firms have lowered their outlooks, including price-target cuts to $12 from Morgan Stanley and Cowen.

Looking back, TRUE shares surged the charts from January to July to touch a two-year high of $21.75 on July 17. The equity has since pulled back to find tough resistance from its 200-day moving average, which has contained breakouts since late September. After today's drop, TRUE stock is trading within one standard deviation of its November 2016 annual low. More bearish analyst attention is possible, too, since five out of eight brokerage firms have "buy" or "strong buy" ratings.

 

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