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Expedia’s Share Price: Analysts Expect Strong Upside


Feb. 21 2019, Published 1:06 p.m. ET

Bullish recommendations

Expedia (EXPE) could be an intriguing choice for investors, according to analysts’ ratings. Analysts covering the stock expect a massive upside in the online travel agency’s share prices. About 69% of the analysts have provided bullish recommendations on the stock.

Among the 32 analysts covering Expedia, seven recommended a “strong buy,” 15 recommended a “buy,” and ten recommended a “hold.” Given analysts’ one-year forward target price of $153.43, the stock has a potential upside of 19.6% from its current price of $128.25.

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What’s driving the optimism?

Expedia’s back-to-back quarters of strong bottom-line results are making analysts optimistic about its growth prospects. The company’s EPS has beat analysts’ consensus estimates in the last four quarters. The EPS has also improved significantly YoY (year-over-year).

Expedia reported its fourth-quarter results on February 7. The company reported an adjusted EPS of $1.24, which beat the estimate of $1.08 and marked a significant rise of ~48% YoY. The strong bottom-line growth was mainly driven by higher revenues, efficient cost management, and the lower tax rate. The company’s revenues of $2.56 billion rose 10% and beat analysts’ forecast of $2.54 billion.

Analysts are optimistic about Expedia’s growth prospects due to the strong global travel demand environment, mainly in the United States. Analysts think that an improving GDP, a healthy job market, and a steady increase in wages are driving the travel demand in the US market. The company’s sustained focus on enhancing its product portfolio and marketing initiatives and its mobile-centric product design should boost its user base.

Due to Expedia’s strong global presence, the company is positioned to benefit from the rising demand for online travel booking platforms. According to Technavio’s latest report, global online booking is expected to grow at a compound annual growth rate of 11% between 2018 and 2022.

Peers’ ratings and target prices

Analysts are bullish on Booking Holdings (BKNG), which received a “buy” rating from most of the analysts tracking the stock. The one-year target price for Booking Holdings signifies a potential upside of 11.7%.

However, other online travel agencies (XWEB) including TripAdvisor (TRIP) and Ctrip.com International (CTRP) have “hold” recommendations from most of the analysts. The one-year target prices for TripAdvisor and Ctrip show potential upsides of 0.7% and 3.5%, respectively.


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