Razorfish and Priceline rise on upgrades
Shares in Priceline.com and Razorfish were both rising on upgrades Monday morning.
Warburg Dillon on Monday said it has raised its ratings of Internet commerce firm Priceline.com Inc. (Nasdaq: PCLN) to "strong buy" from "buy."
Priceline shares, which have been slumping lately despite the company's glowing reports of its sales success, rose 10 percent, up 5 5/8 to 63 7/8. Concerns about Microsoft competition, the approaching expiration of its lock up period, an Internet slump and some bad press have recently thumped the stock.
"Recent sell-off overdone; we are confident that Microsoft Corp.(Nasdaq: MSFT) patent/competition issues are being addressed, and concerns regarding overhang are not as significant as previously thought," said Warburg Dillon analyst Sara Zeilstra in a research note. She raised third quarter margin estimate to 9.9 percent from 9.6 percent based on signs of improved pricing in travel services.
Shares rose 24 percent, up 7 1/2 to 38 3/8, still below their 52-week high of 58 3/8.
In a report, Keirstead said the upgrade was based on "the stronger-than-expected tone of business at both Razorfish and soon-to-be-acquired i-Cube" Inc. (Nasdaq: ICUB).
"We now believe that Razorfish may record the largest 3Q99 (third-quarter 1999) upside revenue surprise (potentially 30 percent) in the Internet consulting sector, and that the acquisition integration risk is real but manageable," he wrote.
Razorfish, which fared well in its second quarter, has seen stock decline since the company's IPO this past spring.
Lehman Brothers kept their price target at $48.
Reuters contributed to this report.