Brean Lowers Ctrip.com Price Target Following Guidance Shortfall

In a note out Wednesday following earnings, Brean Capital analyst Fawne Jiang reiterated his Buy rating on shares of Ctrip.com International Ltd. (ADR) (NASDAQ: CTRP), but lowered the price target from $74 to $64.

Non-GAAP earnings came in at $0.36, beating expectations of $0.32, but guidance was lowered from 35 percent to 30 percent for the fourth quarter, with margins expected to be flat.

In the note, Jiang goes on to state:

"Reiterate Buy rating; Lower TP to $64 from $74. We remain a strong believer in CTRP's long-term story and reiterate our Buy rating on the stock. However, given continued intense competition and stepped up investments, we expect CTRP to face near-term margin pressures in the coming quarters. As such, we lower our TP to $64 reflecting our reduced 2015/2016 EPS estimates. Our price target implies 30x our 2016 EPS estimate of $2.13. Our 30x multiple reflects management's long-term growth guidance of ~30% through 2020. Downside risks to our valuation include: dampened macro outlook, increasing competition, negative impact from natural disasters and epidemics."

Shares opened at $51.77, down more than 11 percent.