Expedia: S&P Downgrades To Hold From Buy On Valuation Basis

Standard & Poor’s analyst Scott Kessler today cut his rating on Expedia (EXPE) to Hold from Buy on a valuation basis. He notes that the stock has rallied 24% from a recent low set last month, and has moved close to his $26 target price.
“We still believe the company is well positioned to benefit from favorable secular trends related to online travel, a stronger and more stable global economy, and healthier spending on leisure and business travel,” he writes. “Additionally, the company’s TripAdvisor business operates as a hedge against rising Internet advertising pricing. Nonetheless, we see the stock as fully valued with a 2010 P/E of 18X and more debt than any other Internet company we cover.”
EXPE today is up 57 cents, or 2.3%, to $24.93.