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Morgan Stanley’s Top 4 Internet Stocks for 2017

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Part 5
Morgan Stanley’s Top 4 Internet Stocks for 2017 PART 5 OF 5

Morgan Stanley on Priceline: ‘Top-Line Addressable Market Is Expanding’

Morgan Stanley on Priceline

Morgan Stanley (MS) included Priceline (PCLN) in its top four Internet stock picks. The Priceline Group is a service-based company that provides online booking platforms for restaurants and travel services.

Morgan Stanley on Priceline: ‘Top-Line Addressable Market Is Expanding’

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Morgan Stanley wrote, “PCLN’s top-line addressable market is expanding … we believe PCLN has early leadership and traction in the vacation rental space, PCLN’s leading consumer reach, traffic acquisition, and conversion capabilities, and growing selection of vacation rental properties position it to take share in the alt. accommodations market.”

Expansion in its top-line addressable market indicates that it could help the company increase its profit margin. The improvement in its customer base is a positive sign for the company.

Morgan Stanley expects a target price of $1,950.00 for Priceline (PCLN) and is overweighting the stock. The investment firm is expecting an 11% upside for Priceline from its April 21, 2017, closing price of $1,752.00.

Priceline’s performance

Priceline is currently trading at $1,804.00. Its 52-week high is $1807.78, and its 52-week low is $1,148.06. On a YTD (year-to-date) basis, the stock returned 22% on April 26, 2017. The stock has returned nearly 45.7% over the last two years, and it’s currently trading at a price-to-earnings multiple of 42.3x.

The Technology Select Sector SPDR ETF (XLK), which tracks the performance of the technology sector, returned nearly 10.7% on a YTD (year-to-date) basis on April 26, 2017. The broader market S&P 500 Index (SPY) (QQQ) returned 5.7% during the same period.

For another perspective on equity markets, please read Bill Gross: ‘Equity Markets Are Priced for Too Much Hope’.

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