Play the stock, not the sector.

Goldman Sachs analyst James Mitchell is preaching divergence within the red-hot online travel space, downgrading shares of Expedia (Nasdaq: EXPE) while dramatically boosting his price target on priceline.com (Nasdaq: PCLN).

Expedia is being marked down -- from "buy" to "neutral" -- seemingly on the basis of its huge run in recent months.

However, priceline has also been on a monster tear. The "Name Your Own Price" site's stock has nearly doubled since its summertime lows. Expedia has only appreciated by half as much in that time.

Why is Expedia being downgraded, while Mitchell is sticking to his "buy" rating on the pricier priceline -- and bumping up its target price from $320 to $420?

Priceline has been the class of the stateside travel portals in recent years. One has to go all the way back to the first quarter of 2006 to find the last time that the website operator didn't blow away analyst profit expectations, and even then its crime was that it simply met Wall Street's target.

It also doesn't hurt that the sector is on fire. Even Orbitz Worldwide (NYSE: OWW) -- a laggard even in Expedia's eyes -- has treated shareholders to a 78% spurt since July's low. Travel deals publisher Travelzoo (Nasdaq: TZOO), while not a conventional booking portal, has more than doubled over the past three months.

The excitement is contagious overseas. Shares of China's Ctrip.com (Nasdaq: CTRP) have gained nearly 50% since its July lull. India's leading site MakeMyTrip (Nasdaq: MMYT) popped 89% on its first trading day in August, making it Wall Street's best performing IPO debut since 2007.

Unfortunately for those warming up to the sector now, it bears pointing out that the stock gains have outpaced earnings growth here. You can find great bargains on the priceline.com site itself, but the shares aren't much of a deal. Mitchell's price target of $420 implies an earnings multiple of 34 this year and 28 if we look out to 2011. Yes, priceline has a refreshing habit of making mincemeat out of those guesstimates, but it's still a rich multiple.

I've been a big fan of this niche for years, but I think I'll sit this leg of the flight out.   

Are online travel stocks overpriced? What's your favorite player in this field? Share your thoughts in the comments box below.

Priceline.com is a Motley Fool Stock Advisor selection. Ctrip.com International is a Motley Fool Hidden Gems pick. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarriz has been booking travel online since the 1990s but he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.