Sector Snap: Online travel stocks mostly decline

Most online travel stocks declined Monday, with Orbitz Worldwide Inc. falling as a Citi Investment Research analyst started covering the stock with a "Hold" rating, citing strong competition.

Orbitz shares slipped 39 cents, or 5.5 percent, to $6.77 in midday trading.

Citi analyst Mark S. Mahaney started coverage with a $9.50 price target.

In a client note, he wrote factors such as its valuation and general growth in the online travel space make Orbitz shares "potentially compelling" over time. Still, "substantial competition" from Expedia Inc. and Priceline.com Inc. has cost Orbitz market share, he said.

In a separate note, Mahaney reiterated his "Buy" rating for Expedia shares, saying the company "provides broad exposure to online travel's secular growth" and that the company's execution is improving. He also said the stock is "very attractively" valued.

The analyst holds a $37 price target for the stock.

Mahaney added that he sees potential for the company to announce a major share repurchase in the near future.

Shares of Expedia rose 12 cents to $22.50, while shares of Priceline fell $1.42 to $131.06.

Elsewhere in the sector, American Depositary Shares of Chinese online travel company Ctrip.com International Ltd. fell 38 cents to $53.10, while ADS of competitor eLong Inc. fell 5 cents to $7.84.