Susquehanna Adjusts Price Target for Expedia Amidst Challenges in Bookings and Vacation Rentals
On Monday, Susquehanna, a leading investment and wealth management firm, revised its price target for Expedia, a prominent online travel platform, from $120.00 to $145.00. Despite the adjustment, the firm maintained a Neutral rating on the stock.
This move comes on the heels of Expedia’s fourth-quarter earnings report, which revealed that bookings fell short of expectations. The disappointing performance was largely attributed to weaker air travel and a conservative outlook for the first quarter. Both factors continue to impact the company, along with challenges faced by Vrbo, Expedia’s vacation rental brand.
Despite the lower-than-anticipated bookings and subdued guidance for the first quarter, Expedia’s management remains optimistic about the company’s revenue growth prospects for 2024. They are anticipating a revenue increase of over 10% and a margin expansion of at least 75 basis points. This confidence stems from the expected continued penetration of online hotel bookings and alternative accommodations.
While Susquehanna remains cautious, they acknowledge Expedia’s potential in the online accommodation space. The firm’s analyst highlighted the balanced risk/reward profile at Expedia’s current market levels as the reason for maintaining the Neutral rating, despite the positive long-term revenue and margin outlook.
Investors and market watchers are closely monitoring Expedia’s performance, particularly with regards to the challenges in air travel and Vrbo’s operations. The company’s ability to capitalize on growth opportunities within the online hotel and alternative accommodations sectors is also of great interest.
The adjusted price target indicates that, despite near-term headwinds, there is an expectation for Expedia’s value to rise in the longer term. As the travel industry continues to navigate challenges, Expedia’s ability to adapt and capitalize on evolving market trends will be closely watched.
Analyst comment
Positive news: Expedia’s management remains optimistic about revenue growth prospects for 2024, anticipating a revenue increase of over 10% and margin expansion.
Neutral news: Susquehanna maintains a Neutral rating on Expedia’s stock due to balanced risk/reward profile.
Negative news: Expedia’s bookings fell short of expectations and weaker air travel and challenges faced by Vrbo continue to impact the company.
As an analyst, it is expected that Expedia may face short-term challenges due to weaker bookings and air travel, but the company’s long-term revenue and margin outlook is positive. Investors will closely monitor Expedia’s ability to adapt and capitalize on market trends in the online accommodation space.
