Phil Noble | Reuters
Investors should buy Priceline Group due to improving profits from lower advertising costs and new market expansion, according to Morgan Stanley, which raised its rating on the internet travel company to overweight from equal weight.
"The two leading OTAs [online travel agencies] show the first signs of acting as rational players in a global duopoly," Morgan Stanley's Brian Nowak wrote in a note to clients Thursday.
"We see this more rational ad environment enabling this to continue, and we lower forward ad spending, now expecting PCLN's adj. EBITDA margins to rise in '16 for the first time in five years."
