Sector Snap: Web travel stocks trade mixed; Orbitz falls

Shares of online travel stocks mostly declined Thursday, with Orbitz Worldwide Inc. falling after a Piper Jaffray analyst downgraded the stock and lowered his price target following its first-quarter report.

Orbitz shares fell 78 cents, or 10 percent, to $7.03 in midday trading. In the past year, the stock has traded between $4.51 and $15.

In a client note, Piper Jaffray analyst Aaron M. Kessler lowered his rating for the online travel company to "Neutral" from "Buy" and decreased his price target to $8 from $10, citing a "more challenging U.S. outlook" for the company.

Kessler called Orbitz's first-quarter results _ which were released Wednesday _ "weak," with domestic gross bookings dipping while international gross bookings jumped.

Kessler lowered his 2008 estimates, saying he expects more conservative growth in Orbitz's domestic market as the company indicated weakness in its domestic business is persisting and it is continuing to pull back from pricier online ad channels.

Meanwhile, shares of competitor Priceline.com Inc. rose 16 cents to $122.19 ahead of its first-quarter report scheduled for Thursday afternoon.

In a client note, Stifel Nicolaus & Co. analyst George Askew predicted the company will report a strong quarter, helped by 85 percent growth in its international gross bookings.

"The European economy and travel industry have held up well, we believe, compared to the domestic travel industry which we believe has experienced more stress," he said.

Askew rates the stock "Hold."

Elsewhere in the sector, shares of Expedia Inc. rose 35 cents to $24.41, and shares of online travel information site operator Travelzoo Inc. fell 17 cents to $10.55.