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How Has the Market Reacted to Priceline’s Acquisition of Momondo?

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Priceline stock has fallen

The market has reacted positively to Priceline’s (PCLN) acquisition of Momondo. Since Priceline announced the acquisition on February 7, 2017, the stock has gained ~3.2%. Its Chinese online travel partner, Ctrip International (CTRP), has gained ~12.2%.

However, rival Expedia (EXPE) has lost ~1.9% in the same period, while TripAdvisor has lost ~16.4%, mostly due to its lackluster 4Q16 earnings. You can read the detailed analysis in TripAdvisor’s 4Q16 Earnings Overview: More Pain Ahead?

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Year-to-date performance

Year-to-date through February 23, 2017, Priceline (PCLN) stock has risen 11.7%, outperforming rivals Expedia and TripAdvisor (TRIP). Expedia stock has risen 5.6% in the same period, while TripAdvisor stock has lost 6.3%. CTRP stock has outperformed all peers and has risen 20.7%.

Because online travel is a discretionary budget item, it could be compared with the consumer discretionary sector. The Consumer Discretionary SPDR ETF (XLY) has risen 6.3% in the same period. The broader market, tracked by the SPDR S&P 500 ETF (SPY), has risen 5.8% in the same period.

2016 performance

After a disappointing start to 2016, Priceline stock had quite a good run for the year. The stock gained almost 15.2% for the year, while Expedia fell 10.4%. TripAdvisor lost 45.7% of its value in 2016, while Ctrip lost 17.9%. The SPDR S&P 500 ETF gained 8.7% while the Consumer Discretionary SPDR ETF gained 3.7% in the same period.

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