Groupon shares up on positive analyst assessments

Analysts take more positive stance on Groupon, shares rise ahead of 3ed-qtr financial results

Associated Press

Groupon Inc. shares rose Monday after two analysts took a more positive position on the online deal provider just ahead of its latest quarterly report.

The Chicago-based company is scheduled to report its third-quarter financial results on Thursday.

Groupon's stock price dropped 22 percent since hitting 52-week high on Sept. 19, closing Friday's session at $9.93. Some analysts said that price decline created a good opportunity to invest.

Deutsche Bank analyst Ross Sandler said in a research note that shares had fallen on concerns about the company's billings growth for the third quarter. While some analysts are anticipating billings will be down, which would cause its revenue to come in below forecasts, Sandler expects the company's revenue to meet average expectations. He also said that eight of the company's nine billing units should improve. The final one is still in ramp-up stages.

Sandler noted that the company has rolled out a number of innovations that have gone largely unnoticed by the investment community, which should help its business in the long run.

The analyst reiterated a "Buy" rating and gave a $17 price target.

Meanwhile, Goldman Sachs analyst Heath Terry said he expects Groupon's results will modestly exceed market expectations on gains in its North American and international business. The analyst said that traffic was robust in the third quarter and reiterated a "Buy" rating with a $13 price target.

Groupon named its co-founder Eric Lefkofsky as CEO in August and said it plans to buy $300 million of its own stock over the next two years. Lefkofsky replaced Andrew Mason, who was fired from the online deals site in February amid growing concerns about its financial performance.

Shares of the company added 64 cents, or 6.4 percent, to close at $10.57 Monday. While down in recent weeks, the stock has more than doubled since the start of the year.

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