Benzinga - by Shivani Kumaresan, Benzinga Staff Writer.
Oppenheimer analyst Jed Kelly reiterated an Outperform rating on the shares of Expedia Group Inc (NASDAQ: EXPE) and raised the price target from $135 to $175.
The analyst expects lodging bookings to increase 10% and 8% Y/Y in FY24 and FY25, respectively, compared to a 9% growth in Q4 FY23.
Potential upside from the tech migration generating higher conversions, easing Vrbo comps, and re-entering key European markets might be beneficial, adds the analyst.
The analyst sees advertising leverage benefiting from a higher direct traffic in core B2C Markets (U.S./U.K./Australia) and increasing brand efficacy on One-Key's ability to highlight Big-3 Brands simultaneously.
The analyst sees tech migration reducing redundancies in cloud, licenses and maintenance, thus allowing engineers to focus on higher platform efficiencies around conversion/ operating expenditures.
According to the analyst, deeper AI integrations is expected to provide most immediate benefit to customer service.
The analyst forecasts management deploying $3.3 billion on stock repurchases in FY24/ FY25, equating to a 6% reduction in shares, while retiring $1 billion in debt, implying a net-debt ratio of 2x by 2025.
The analyst sees EBITDA growing at FY23E-FY25E CAGR of 13%, on 9% revenue growth, gross margins expanding 40 basis points, limited S&M leverage, and Opex growing 7%.
So, according to the analyst, EXPE remains the top online travel pick into FY24E on higher operational efficiencies from unifying its tech-stack/loyalty-programs and increasing B2B scale.
Price Action: EXPE shares are trading higher by 2.69% at $149.41 on the last check Monday.
Latest Ratings for EXPE
| Mar 2022 | Deutsche Bank | Initiates Coverage On | Buy | |
| Feb 2022 | Morgan Stanley | Maintains | Equal-Weight | |
| Feb 2022 | Citigroup | Maintains | Neutral |
View the Latest Analyst Ratings
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