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NEW YORK - An analyst downgraded shares of online travel operator Orbitz Worldwide Inc. on Wednesday because of slow growth in bookings, greater competition and a weak economy.
Goldman Sachs analyst Jennifer Watson cut her rating on the stock to "Sell" from "Neutral" and slashed her price target to $2.70 from $6.80, implying 15 percent downside to Tuesday's closing price of $3.18.
Watson said Orbitz has grown gross bookings more slowly than Expedia Inc. and Priceline.com Inc., and she does not expect this to change in a more challenging economy.
Orbitz will underperform Expedia and Priceline, Watson said, because of heavy reliance on domestic air travel, which brings in 25 percent of revenue and has been hurt by cuts in airline capacity.
Watson also said Orbitz is positioned less favorably abroad and relies too heavily on consumer fees.
On Monday, Orbitz posted a bigger third-quarter loss and said it plans to cut its U.S. work force by 10 percent.
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