Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is set to deliver second-quarter results on August 22nd, and investors wait in the wings with expectations for upside to margins. Oppenheimer top analyst Jed Kelly predicts a margin beat on Sales & Marketing in particular as well as solid results across the board for the online travel leader, highlighting the advantage of a stable travel environment.

Ahead of earnings, Kelly reiterates an Outperform rating on shares of CTRP with a $55 price target, marking a nearly 19% increase from where the shares last closed. The company recently saw a 10% appreciation, which the analyst attributes to solid China consumer Internet earnings as well as positive investor sentiment anticipating margins for the quarter.

However, Kelly explains, “With margin expansion as the main near-term catalyst, increasing competition from sub-scale players, and QUNR’s ongoing China Southern dispute, could produce cautious commentary around 3Q profit, thus causing near-term volatility in shares, despite a potential 2Q EBIT beat, in our view. We believe CTRP is well positioned to leverage China’s transition to a consumption economy by consolidating its growing online travel market, and would take advantage of any near-term weakness to accumulate shares.”

Though Kelly cites a concern that TOUR has introduced competing stand-alone air and hotel products that might incite near-term discounting coupled with Sales & Marketing pressures, he doubts the “sub-scale player” will prevail in a long-term competition.

According to TipRanks, top five-star analyst Jed Kelly has achieved a high ranking of #73 out of 4,124 analysts. Kelly upholds a steady 78% success rate and realizes 34.7% in his annual returns. When recommending CTRP, Kelly earns 53.2% in average profits on the stock.

TipRanks analytics demonstrate CTRP as a Strong Buy. 100% of analysts polled in the last 3 months rate a Buy on CTRP. The consensus price target stands at $51.33, marking just under an 11% upside from where the stock is currently trading.

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Ctrip.com International, Ltd. (ADR) (CTRP) 2Q16 Earnings- What to Expect