Deutsche Thinks Ctrip Has Plenty of Room to Fly

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Ctrip.com International (NASDAQ: CTRP  ) closed yesterday up 8% after Deutsche Bank upgraded the stock to "buy" from "hold."

So what: Along with the upgrade, analyst Vivian Hao boosted her price target on the stock to $65 per share (from $35.20), representing about 17% worth of upside to where it sits now. Hao cited strong booking volumes -- particularly hotel sales made via mobile devices -- for the upbeat view, suggesting that the company can continue to keep its breakneck growth rate up.

Now what: Don't expect the operating momentum to slow anytime soon. "We believe CTRP is rapidly emerging as a clear travel solution leader in mobile, aided by founder James Liang's return," wrote Hao in a note to clients. "As such, despite intensifying competition, we expect Ctrip revenue/earnings growth to reaccelerate instead of decelerating as the market expects." Of course, with the stock now up a whopping 225% over the past year and trading at a forward P/E of 45, Ctrip doesn't exactly have a wide margin of safety built into it, either. 

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