UPDATE: Benchmark Company Reiterates on Expedia Following Solid 3Q Results
In a report published Thursday, Benchmark Company analyst Daniel L. Kurnos reiterated a Buy rating on Expedia (NASDAQ: EXPE), and raised the price target from $66.00 to $73.00.
In the report, Benchmark Company noted, “Expedia (EXPE-Buy, PT from $66 to $73) reported 3Q results which exceeded expectations. We had called shares of Expedia a compelling opportunity back in August as domestic competition concerns, which we thought were overstated, and modest international underperformance against the consensus view had depressed valuation to under 7x EV/EBITDA. While the exact timing of any recovery in brand impairment was uncertain, we believed the short booking window playing field would stabilize, with TripAdvisor's metasearch CPCs expected to normalize as well, and the ETP program rollout helping drive incremental growth. Hotwire appears to have since stabilized along with marketing spend in the metasearch/TripAdvisor (TRIP-Not Rated) channel, resulting in a traffic recovery for Expedia. We are maintaining our 2014 estimates, which already assumed a modest reversal in trend, calling for 15% bookings, 13% revenue and 17% EBITDA growth, the latter of which includes no benefit from the Travelocity agreement which could add an incremental $20+ million to EBITDA. Even using what we view as conservative estimates, shares look to only be trading at 8x 2014 EV/EBITDA after hours, still offering meaningful upside potential.”
Expedia closed on Wednesday at $49.96.
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