Shares of online travel company Expedia (EXPE-US) rose nearly 5% on Wednesday (11th) after Oppenheimer analysts upgraded the company’s rating from “market perform” to “outperform.”
An analyst team led by Jed Kelly has a $120 price target on Expedia stock, emphasizing that the company has improved profit margins by cutting costs and improving customer service efficiency.
Kelly believes that Expedia has improved margins over the past 3 years, and as revenue rises to 2019 levels (before the new crown epidemic began to destroy the travel industry), Expedia can maintain this improvement in margins, in part due to the company’s success in building its Technology system to make operation smoother.
Kelly also expects Expedia to leverage its expertise in leisure travel to offer a more streamlined business-to-business (B2B) offering, “One Key” to be more consistent this year, and improve business performance in direct traffic. (One Key is a membership program that bundles Expedia, Hotels.com, Orbitz and Vrbo.)
Expedia reported third-quarter revenue in November that topped Wall Street expectations, but gross bookings fell short of expectations. Last September, the company said Julie Whalen, formerly CFO of Williams-Sonoma (WSM-US), would take over as CFO of Expedia.
“With Expedia’s new CFO, a 10-year veteran of the same role at a leading consumer brand, we expect improved guidance on quarterly trends and more proactive investor engagement,” Kelly wrote road.
Expedia rose 4.86% on Wednesday to close at $99.24 per share. The stock is down about 52% in 2022, according to Dow Jones Market Data.
