Expedia Group Inc. (EXPE) Stock Rating Downgraded to Hold by TD Cowen - Price Target Set at $150
Expedia Group Inc. (NASDAQ:EXPE) shares saw a shift in their stock rating as TD Cowen downgraded their stance from "Buy" to "Hold." The firm also set a price target for Expedia at $150.00. This downgrade comes after a period of weakness in the company's business-to-consumer (B2C) segment, which only saw a 1% growth in gross booking value (GBV) for the second quarter.
TD Cowen cited multiple reasons for the downgrade, including consecutive guide cuts in the past three quarters due to the underperforming B2C sector. Concerns were also raised about a potential long recovery period needed for this segment to improve. Additionally, Expedia's advertising spending is expected to increase to 50% of its revenue by 2024, with a projected business-to-business (B2B) revenue share of 55-60%.
The shift in rating also takes into account the challenge Expedia may face in 2025 with cost-cutting comparisons. Despite a current P/E discount of 33% compared to Booking Holdings (BKNG) Inc. and the S&P, any fourth-quarter earnings acceleration is likely to be influenced by comparables and foreign exchange rates. The $150 price target is based on 14 times the estimated P/E for 2025.
In conclusion, investors should keep an eye on Expedia's financial performance and strategic decisions as they navigate through these challenges. The downgrade by TD Cowen reflects a balanced risk/reward profile for Expedia in the face of these headwinds.
Analysis:
- Expedia's stock rating downgraded from "Buy" to "Hold" by TD Cowen
- Price target set at $150.00
- Weakness in B2C segment cited as reason for downgrade
- Concerns about potential long recovery period for segment improvement
- Increased advertising spending and challenge in cost-cutting comparisons also factors
- Investors should watch for signs of improvement or further adjustments
- Expedia's B2B segment showing growth in bookings and room nights
- Various analysts have different ratings for Expedia
- Peter Kern steps down as Vice Chairman
- One Key loyalty program paused for reevaluation
- Real-time data from InvestingPro provides insights into Expedia's financial health and market performance
- Key considerations include market capitalization, P/E ratio, and gross profit margin
- Management's confidence shown through share buybacks
- Stock price movements volatile, RSI indicates potential pullback or consolidation
- Investors urged to make informed decisions based on evolving business strategy and market conditions