I am going to cover a stock I have never profiled before in today's morning article around stocks with positive momentum. I don't know if this because of all the William Shatner appearances in the Twilight Zone marathon during New Year's or just some recent positive comments from analysts, but we are going to take a look at Priceline (PCLN) today.
Recent positives for Priceline:
- Over the last three months, consensus earnings for FY2013 have moved up over a dollar to $37.44 a share. FY2012's consensus has moved up some 60 cents in that timeframe as well.
- B of A just upgraded the shares from "Neutral" to "Buy" while raising its price target to $770 from $690. B of A cited the company's growth potential and recent acquisition of Kayak as drivers of the upgrade.
- TheStreet also reiterated is "Buy" rating on Priceline today
- The top five holders of the stock are "Tiger Cubs", well funded disciplines of famed investor Julian Roberston.
Priceline.com is the largest online travel company in the world.
4 Reasons PCLN is a good growth play at $650 a share:
- The company is expected to post revenue gains right around 20% for both FY2012 and FY2013. The stock sports a five year projected PEG of right around 1 (.99).
- Priceline consistently beats consensus earnings estimates. It has beat consensus on the bottom line for twelve straight quarters.
- The company has tripled its operating cash flow over the past three years and the stock trades at 17x forward earnings, a bit under its five year average (20.1). The shares are little cheaper than they appear as approximately 10% of its market capitalization is represented by net cash on its balance sheet.
- The median price target by the 22 analysts that cover the stock is $750 a share, $100 above the current stock price. Credit Suisse has an "outperform" rating and a $838 price target on the shares.