Priceline.com shares fall after Citigroup cuts price target to $142 from $161

NEW YORK, Jul 01, 2008 (Thomson Financial via COMTEX) -- PCLN | Quote | Chart | News | PowerRating -- Shares of Priceline.com fell Monday after Citigroup lowered its price target on the company to $142 from $161, citing potential weakness in the company's European division.

In a note to clients published Sunday, Citigroup said macroeconomic trends were weakening in Europe, as were European travel trends. There are signs of weakness spreading from the U.K. to Spain, it said, forecasting a decline in revenue per available room in both 2008 and 2009.

The firm maintained its hold rating on the online travel company, calling it a "clear market share gainer."

"Priceline's huge installed base advantage almost 45,000 hotels in Europe vs. 15,000 for Expedia means it is unlikely to face material marketing inefficiencies near-term," it said, though it expects the installed base advantage will diminish over the next one to two years.

"We don't believe Priceline has counter-cyclical hedges in Europe for when that market really weakens," it said.

Shares of Priceline fell 7.4% to $115.93 in afternoon trading Monday, while Expedia shares declined 3.2% to $18.53. An intraday low of $18.31 represented the worst price for Expedia shares since December 2006. Ryan Vlastelica rv/vj

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

MMMM

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index