Ahead of the Bell: Priceline expected to post strong 1Q

Piper Jaffray analyst Aaron M. Kessler kept a "Buy" rating on the Norwalk, Conn., company saying he expects travel within Europe to help fuel results.

The strong outlook comes after competitor Expedia Inc. posted a 48 percent jump in first-quarter profit, assuaging concerns about the online travel sector in the tepid economy.

Expedia said continental European sales rose 58 percent during the last period, a positive sign for Priceline as about 70 percent of its profits come from European bookings, Kessler said.

Kessler's $147 price target implies he expects the stock to jump about 15 percent over Thursday's $128.23 close.

Priceline guided for an adjusted first-quarter profit of 50 cents to 60 cents per share. Analysts polled by Thomson Financial expect, on average, earnings of 59 cents per share for the period.

However, Citi Investment Research analyst Mark S. Mahaney downgraded Priceline.com to "Hold" from "Buy" on Thursday, citing the stock's recent movement closer to his $137 price target.

"We continue to view Priceline as a core Internet stock, but would prefer" a share price closer to $110, Mahaney said in a note to clients.

Quarterly results are set to be released May 8.