FBR Sees Encouraging Q3 For Expedia

In a note out Monday, FBR thinks third quarter trends look favorable for Expedia EXPE.

Some of the highlights noted:

• The form sees 25% room night growth for EXPE versus 23% in June, accompanied by healthy ADR acceleration
• Look for EXPE's domestic ticket volume growth ramped from 39% in June to 41% in July
• July trends point to domestic bookings growth for the quarter of around 30%

FBR also noted that a recent change on Market Perform-rated TripAdvisor TRIP meta path appears to favor EXPE, which looks to be gaining share on the platform, and that could be a late August to September tailwind.

FBR has a Buy rating on Expedia with a $95.00 price target.

Sum of parts from FBR: We base our $95 price target on an SOTP analysis valuing the core business at $80 (9x EBITDA), Trivago at $9 (3x 2015 revenue), and eLong-Travelocity at $6.