Orbitz: Goldman Says Sell; Slashes Target; Stock Tumbles
Orbitz (OWW) shares are coming under pressure this morning after Goldman Sachs analyst Jennifer Watson cut her rating on the stock to Sell from Neutral. She slashed her price target on the online travel services company to $2.70, from $6.80. “Orbitz has grown gross bookings more slowly than both Expedia and Priceline, and we do not anticipate a reversal in a more challenging economic environment,” she writes. Watson also notes that leverage is high, with net debt 4x EBITDA, reducing flexibility. She points out that 50 percent of excess cash flow must be used to repay debt.