Photo: Associated Press
Expedia and Orbitz’ shares are both down big today on a dual downgrade from The Benchmark Company. Orbitz is down nearly 12% and Expedia is tanking with its shares falling almost 17%.Benchmark lowered the price target on Orbitz from $9 to $5 because of “its lack of profit growth potential in 2011.”
Expedia’s price target was slashed from $36 to $26 by Benchmark. The downgrade was due to the company’s announcement that its new investments in technology and marketing tactics would hurt earnings in the first half of this year.
This announcement followed a disappointing earnings report from Expedia Thursday that reported fourth-quarter net income was down to $71.3 million from $102.2 million in 2009.
Both companies are being impacted by American Airlines using its own in house reservation system to book flights and removing its schedule data from their sites. Other airlines are expected to follow this new model which would be even worse news for Orbitz and Expedia.
Business Insider Emails & Alerts
Site highlights each day to your inbox.