Expedia Moves Higher On Solid Quarter, Analysts Like What They See
Expedia (NASDAQ: EXPE) moved five percent higher on Friday due to a stellar earnings reported, followed by a sequenced of upgrades in research notes from various analysts.
Benchmark - reiterates Buy, raises price target from $85 to $94:
“Expedia recorded strong 2Q14 results, marked by accelerating hotel room-night growth and a significant step-up in acquired hotel supply, including a meaningful acceleration of the ETP program rollout. Gross bookings exceeded consensus by $135 million driving $50 million of revenue outperformance, the majority of which flowed through to EBITDA, leading to $0.27 of EPS upside. As a result, management did EBITDA raise guidance for the year from 13-16% growth to 16-19% growth, representing $1.03 billion at the mid-point but only $15 million ahead of prior consensus given planned reinvestment and some increasingly challenging comparisons in the back half of the year.”
Raymond James - raises from Market Perform to Outperform, raises price target to $100:
“Expedia continues to experience solid room night growth (~23% normalized in 2Q); 2) we believe operating margins should begin to expand given Expedia is past its investment cyle and should see leverage across COGS, technology, and G&A; Our $100 target price is based on 21x our 2015 non-GAAP EPS estimate of $4.77, above its 1-year average of 17x. We believe a premium vs. its average is warranted given Expedia's continuing solid revenue growth and improved operating leverage, and likely continued upside to estimates. This 21x multiple also equates to a PEG of 1.2x, in line with the online travel group.”
Cantor Fitzgerald, reiterates Buy, raises price target from $82 to $92.
“Strength across all major Expedia brands as well as better-than-expected performance of the Travelocity partnership contributed to solid 2Q results that were comfortably above Street expectations. We remain constructive on EXPE, given a) our view that healthy organic growth in room nights is sustainable (driven by ETP, product improvements, etc.), b) strong momentum in Trivago, c) potential for further upside from Travelocity partnership, and d) the stock's attractive valuation at ~9x CY:14E EBITDA.”
UBS - reiterates Buy, raises price target from $85 to $95:
“We were less positive on: a) implied 2H EBITDA guide (which might be conservative) that suggests continued strong investments in marketing, hotel count growth & salesforce hiring; b) continued weak management commentary about Hotwire business; & c) expectation of trivago revs slowdown in 2H against tough comp.”
Expedia traded recently at $83.73, up 5.4 percent.
Latest Ratings for EXPE
|Nov 2014||Credit Suisse||Initiates Coverage on||Neutral|
|Oct 2014||Credit Suisse||Maintains||Neutral|
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