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Update: Ctrip (CTRP-Nasdaq) to hit $70+

Posted May 8, 2008

by Laura Cadden

Baltimore — (TFN): On April 4, I predicted that the stock price of Ctrip.com (CTRP:NASDAQ) would go up, “at LEAST 15% by the Summer Olympic’s Opening Ceremonies. (Read the full article here.) The price was around $54 on that day.

When Ctrip exceeded our maximum projected target and hit 20% gains on May 1, I recommended that   cautious investors go ahead and take profits. But I also adjusted my target gain for the more venturesome: “Keeping $63 as a stop loss, I’m holding out for 30% or August 8—whichever comes first.”

CTRP dropped as low as $63.25 over the last couple of days after a solitary Piper Jaffray analyst lowered his rating his rating to “Neutral” from “Buy.”  According to him, the Chinese online travel company has reached a “fair price,” but he maintains a price target of $68.

While I agree that the stock certainly is no longer an exceptional buy after the recent run-up, I believe that we may see prices increase 30% over our entry price to $70+ as the Chinese ramp up last-minute promotion of the Olympic Games both domestically and internationally.

(It did so on May 5, remaining a mere 13 cents below our strike price.)

The company will report its first-quarter results on May 14 and is likely to exceed analyst estimates, if only by a small margin. Second-quarter earnings, however, should provide the necessary catalyst to fuel another surge in the stock price.

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Posted by Laura Cadden · Filed Under International Investing 

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