Orbitz: Credit Suisse Sees Potential Takeover Target, Raises Ests; Also Ups Forecasts For PCLN, EXPE

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Could Orbitz (OWW) be a takeover target?

Credit Suisse analyst Scott Barry raises that possibility in a research note this morning on the online travel agency. Barry, who has an Outperform rating on the stock, thinks the company offer a potential buyer some attractive characteristics. In particular, he notes that the company has $10 billion of gross volume, “under-monetized traffic,” “visibility on $150 million of stable EBITDA,” and an improving competitive position. Put that together, he suggests, and the company could be interesting to a strategic acquirer.

Barry made the comment in a research note in which he upped his 2009 adjusted EPS estimate for the company to 18 cents, from 9 cents, citing better third-party unit volumes and improved marketing efficiency. He adds that recent fee cuts are offset by improved volumes and lower costs. Barry set a price target today of $9; he previously was using a range of $7-$9.

Meanwhile, Barry also raised estimates and target prices for Expedia (EXPE) and Priceline (PCLN). He maintains Outperform ratings on both stocks.

• For Expedia, his target is now $29, up from$21; his 2009 EPS estimate jumps to $1.37, from $1.16.


• For Priceline, his target is now $185, up from $165; his 2009 EPS estimate forecast is now $7.65, up from $7.50; for 2010 he goes to $9.20, from $8.88.

In today’s trading:

• OWW is up 67 cents, or 10.3%, to $7.19.


• EXPE is up 74 cents, or 2.9%, to $26.31.


• PCLN is up 95 cents, or 0.5%, to $177.02.