Prudential Upgrades Expedia to 'Buy'
Prudential upgraded Expedia (EXPE ) to buy from hold.
Analyst Mark Rowen says despite a difficult environment for travel companies, Expedia reported blowout Q4 results; he was looking for $0.15 EPS. Rowen cited stronger than expected top-line performance, as a result of market share gains, coupled with higher than expected gross margins. He believes Expedia is the new heavyweight champion in online travel, based on Q4 gross bookings;. The company continues to gain market share from Travelocity. Rowen still thinks the pending USA Networks stock exhange offer is below the current value of Expedia, and Expedia shareholders will vote on the proposed merger on Feb. 4. He raised his $30 target to $75, and raised his $1.00 2002 EPS estimate to $1.50. Finally, Rowen sees $2.25 2003 EPS.