Groupon: Deutsche Sees Weaker Local Trends, Stifel Starts at Hold

Deutsche Bank’s Jeetil Patel this morning reiterates a Hold rating on shares of Groupon (GRPN) and a $21 price target, writing that a conversation he’s had with local deals aggregator Yipit suggests that Groupon’s “core business” is slowing this month, with deal volume perhaps flat with last month or slightly down.

Part of the trend is a shift by Groupon, apparently intentional, to sell more travel “deals” and fewer local deals, something that may be helping the company overseas but hurting it in its North American market, writes Patel.

The trend is a continuation of what went on in October and November, he suggests:

Yipit estimates the NA core daily deals business is flat to slightly down in October and with similar trends in November, while the newer travel Groupons show strong QoQ growth helping somewhat offset declines in the core. We note that (1) the data discussed was not explicit, (2) we are hesitant to put too much stock in any unproven 3rd party data, and (3) the final two weeks of the quarter will be critical. We believe slowing sub growth may result in more impact this year from seasonality (users on vacation not buying Groupons) though Groupon��s holiday sales effort (Grouponicus) may overwhelm that. We look for 4% QoQ gross bookings growth in 4Q.

The stock got another lukewarm view this morning from Stifel Nicolaus’s Jordan Rohan, who started coverage with a Hold rating, and a “fair value range” of $18 to $20.

Rohan writes of the company, “Groupon��s ‘get big fast’ strategy to dominate the local deals business is bold, potentially revolutionary, and wrought with organizational challenges.”

He also thinks that Groupon’s $15 billion valuation “already discounts several years of hyper growth and margin expansion, which may no! t materi alize as expected.”

In related news, The Associated Press’s Barbara Ortutay this morning writes that Groupon is offering $10 credits to the first 150,00 people to buy a Groupon by December 24th.

Groupon shares today are off 50 cents, or 2%, at $22.54.