Analyst: Priceline Might Beat Q1 Views, Cut Outlook

Priceline Group Inc.

, set to post earnings Thursday before the bell, could beat expectations but cut its forecast on foreign exchange concerns, according to an analyst. A "beat and lower" move by Priceline would be "similar to what we've seen with other consumer Internet companies" with high exposure to foreign currencies during the current earnings season to date, Deutsche Bank's Ross Sandler said. Sandler reiterated a Buy rating on the Norwalk-based travel company, and said a seasonal uptick in European travel from the U.S. may help Priceline's second-quarter results. Stifel's Scott W. Devitt reiterated a Buy on Priceline and said a potential positive surprise from Europe could push the shares higher. About 70 percent of the company's bookings are exposed to the euro, according to Devitt, who noted positive March economic data from the European Commission. "It continues an upward trend that started earlier this year," Devitt said of economic news from Europe. Priceline in February had forecast first-quarter total gross bookings growth of between 2 percent and 9 percent -- or 14 percent to 21 percent on a local currency basis. But Evercore's Ken Sena said currency headwinds have increased by 200 basis points on Priceline since its February forecast. Sena maintained a Neutral rating on the company, citing foreign exchange pressure as well as increasing competition. Amazon.com Inc.

, for example, launched an online travel reservation business last month. http://www.bloomberg.com/news/articles/2015-04-21/amazon-targets-priceline-expedia-with-new-hotel-booking-site Wall Street expects adjusted earnings from Priceline of $7.72 on revenue of $1.8 billion, versus year-earlier adjusted earnings of $7.81 a share, on $1.64 billion. Priceline closed Wednesday at $1,264.15, up $0.83 cents.