at a Good Price?

The online travel agent hopes to boost business at home and appeal to a European market ripe for growth.

The price may be right to invest in online travel agent, known for its "Name Your Own Price" booking system. Citigroup analyst Mark Mahaney upgraded the stock (symbol PCLN) on May 17 to "buy" from "hold" on the premise that Wall Street misinterpreted the company’s first-quarter results. Priceline’s shares rose 6% following the upgrade, and closed at $60.78. Mahaney thinks the shares are worth $69.

The Norwalk, Conn., company’s stock has plunged 10% since it posted its first-quarter results on May 8. The results included a first-quarter loss that widened to $16.3 million, or 44 cents a share, from $964,000, or 2 cents a share, in the first quarter of 2006. These numbers are misleading, however, because the loss stemmed from a $55 charge relating to settlement of a lawsuit. Excluding the charge and other benefits and expenses, Priceline turned out a profit of 43 cents a share. That’s a dime more than analysts were expecting, according to Thomson Financial.

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Staff Writer, Kiplinger's Personal Finance