Why Sabre Stock Lost Altitude on Tuesday
An analyst downgrade was the news that pushed down the share price of Sabre (NASDAQ: SABR) on the second business day of the week. The travel industry software mainstay lost altitude to the tune of over 3%, on a day when the S 500 (SNPINDEX: ^GSPC) index ended up posting an increase of 0.4%.
Well before market open, Bernstein SocGen prognosticator Alex Irving made that Sabre recommendation change. For him, the travel software specialist is now an underperform (sell, in other words), where formerly it rated a market perform (buy). Irving's current price target on the shares is $3 apiece, suggesting potential downside of 18% on the latest closing price.
According to reports, Irving is concerned that Sabre's business is too heavily weighed to its global distribution system (GDS) business, i.e., its traditional computer network system that handles transactions between travel providers (airlines, hotels, travel agencies, etc.). In his latest note on the company, Irving pointed out that this segment comprises around 70% of total company revenue, and that it is not a source of growth at the moment.
Source Fool.com
