Analysts lower their target prices
Most analysts reduced their target prices for TripAdvisor (TRIP) after the online travel booking agency reported a dismal first-quarter top-line performance on May 8. The company’s quarterly revenues of $376 fell short of analysts’ estimate of $386.8 million and were down 1% year-over-year.
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Investment research companies Barclays (BCS), Wedbush, and Stifel Nicolaus have reduced their one-year target prices on the stock.
On May 9, Barclays lowered its target price on the stock to $70 from $78. However, it maintained its “Overweight” rating. Barclays’ analyst Deepak Mathivanan cited TripAdvisor’s comment about a softening macro environment affecting Q2 performance as the main reason for the target price cut.
Although Wedbush reiterated its “Neutral” rating, it lowered its target price on TripAdvisor to $50 from $60. Stifel Nicolaus also trimmed target price on the stock to $50 from $57. However, it kept its “hold” rating on the stock.
Analysts don’t seem very optimistic about TripAdvisor stock’s near-term performance. Analysts polled by Reuters have given TripAdvisor a consensus “hold” rating. As of May 13, three of the 25 analysts covering TripAdvisor stock have provided “buy” recommendations, 16 say “hold,” four say “sell,” and the remaining two say “strong sell.”
Analysts’ average target price on TripAdvisor has fallen to $52.14 from $56.14 on May 7. The current target price represents a potential increase of 13.9% over the next year.
On the other hand, analysts have provided a consensus “buy” recommendation to its top competitors Booking Holdings (BKNG) and Expedia (EXPE). Analysts’ average target prices of $2,014.97 and $150.36 on Expedia and Booking reflect potential upsides of 13.1% and 29.5%, respectively, over the next year.
The Amplify Online Retail ETF (IBUY) has allocated 2.9% and 3.1% of its holdings to TripAdvisor and Expedia stocks, respectively. The ETF has gained 21.8% in the year so far and outperformed the S&P 500 and Dow Jones Industrial Average’s returns of 14.9% and 11.2%, respectively.