Bank Of America Sees A 15.5% Upside To TripAdvisors Shares With Its Instant Booking Platform

In a report published Wednesday, Bank of America analyst Nat Schindler raised the price target on TripAdvisor TRIP from $107.00 to $120.00, a 12 percent increase. Schindler emphasized the "interesting" opportunity that TripAdvisor's new instant book platform presents the potential to increase long-term monetization 30 percent over historical 2013 levels. The analyst noted that this moves the company "towards a commission auction with the provider willing to pay the highest commission receiving the Instant Book slot. We estimate based on our property checks that TripAdvisor will receive a 6% commission with its current provider distribution on average, but believe fees could increase to 12% or more (OTAs are ~15% ex. credit card fees) over time as more hoteliers begin to compete with the OTAs for completed bookings." Bank of America's survey on 253 hotels in major hotel markets showed that Instant Book powered listings 89 percent of the time. Out of these listings, the analyst commented that 65 percent were powered by Tingo.com and 29 percent were powered by Getaroom.com. Schindler raised his 2016 non-GAAP EPS estimate to $4.00. The revised $120.00 price target suggests a 15.5 percent upside to Tuesday's close. The analyst holds a Buy rating on TripAdvisor. Shares of TripAdvisor closed at $104.68 on Tuesday.