Expedia Shares Gain +4.26% Following Analyst Upgrade & Quarter Optimism

Shares of Expedia Inc. EXPE are up more than 4.26 percent following Susquehanna's upgrade and bullish remarks from FBR Capital Markets. Susquehanna Notes Business Improvements Susquehanna analyst Brian Nowak upgraded shares from Neutral to Positive and raised the price target from $79.00 to $90.00. Nowak sees Expedia's three main segments of Travelocity, Trivago, and the core business improving. The analyst remarked that Trivago's traffic if growing 85 percent year-over-year and continues to accelerate. Susquehanna added that Travelocity's traffic conversion is also “materially improving” after the migration to Expedia's platform. Nowak expects Expedia's core business to see 2014 and 2015 EBITDA growth of 8 percent and 10 percent, respectively. Expedia Remains Top Pick In a note published Tuesday, FBR analyst Jake Fuller reiterated an Outperform rating and $85.00 price target on Expedia, emphasizing a healthy quarter outlook from solid domestic room night growth. Fuller noted U.S. room nights rose 30 percent in May and 33 percent for the quarter to date. The analyst added that domestic airline ticket volume for the company is up 34 percent quarter-to-date and “Pending June data, Expedia should be on track to show 30% to 35% domestic bookings growth in 2Q versus a consensus in the 25% range.” FBR concluded that Expedia remains the firm's Top Pick. Fuller commented, “we point to three themes: (1) We continue to see evidence of near-term momentum in the business as we move into a period of easy comps; (2) commentary on the 1Q earnings call indicates Expedia's focus is shifting toward expanding the hotel base, and we see that as a material new leg to the story; and (3) at just 9x 2015 EBITDA, we consider the valuation to be compelling.” Stock Action Shares of Expedia closed at $74.58. The stock traded as high as $77.76 in Tuesday's trading, up 4.264 percent. Shares are currently up 3.916 percent at $77.48.