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Ctrip.Com International (CTRP) Upgraded To 'Buy' By Brean Capital; PT $25

 February 01, 2013 02:04 PM

(By Balachander) Ctrip.com International Ltd. (NASDAQ: CTRP) shares were upgraded to "Buy" from "Hold" by Brean Capital LLC with a price target of $25 on confidence in management's execution and right strategy taking shape.

The brokerage said it is confident that the company has undergone a meaningful fundamental transformation in the past quarters: from

business and offline-centric previously to leisure and online-oriented; from lack of growth due to underinvestment in high growth areas to actively seeking and capturing opportunities.

Brean Capital is of the view that China is at an early stage of robust travel growth on the back of a strong secular trend of travel shifting from offline to online. The key to capturing the growth is the right strategy and execution.

[Related -Yelp Inc (YELP): Yelp! Options Buzzing As Shares Rocket Higher]

"We are confident in management's execution and are positive the right strategy is starting to take shape," the brokerage said in a note.

That said, Brean Capital said its upgrade does not overlook the facts: competition remains intensive and could be intensified down the road;

the upcoming air coupon could likely have some further pressure on margin.

"Yet, with the right strategy and right execution, we believe we will likely see accelerated revenue growth with margin bottoming in the coming quarters," the brokerage wrote.

American depositary receipts (ADR) of the China-based travel service provider jumped 5.30 percent to trade at $20.86 on Friday. The stock has been trading in the 52-week range of $12.36 to $28.12.

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