BKNG Stock – Expedia Group Stock Has an Edge as the Travel Market Heats Up. Here’s Why.
Time to go on vacation.
That’s the basic theory behind the bullish note Tuesday on
Group stock (ticker: EXPE) from
analyst Robert Mollins. He launched coverage of the online travel agency with a Buy rating and $211 target, for a potential gain of about 20%.
He also launched coverage of
(BKNG) with a Hold rating, setting a price target of $2,574, just under 10% above the current level.
Haskett writes that his bullish call on Expedia reflects expectations for both increasing profit estimates and an expanding valuation multiple. The company should “capture pent-up travel demand in coming months driven by its predominantly U.S.-based exposure” and its exposure to both traditional hotels and alternative lodging via its VRBO unit, he writes. He also says the company will emerge from the pandemic as a higher-margin business after cost cuts last year, with potential for more cost savings in coming quarters.
Expedia’s U.S. focus boosts its outlook, he says, given higher vaccine rates than in Europe and Asia, which suggests the U.S. lodging market can rebound faster than others.
His more cautious stance on Booking shares reflects that company’s higher reliance on the European market: He sees a slower pace of reopening given the continent’s lower vaccination rates and ongoing virus outbreaks. “We appreciate Booking’s best-in-class margin profile and sizable alternative accommodations business, but with increased government restrictions and rising case counts in Europe, we believe that near-term multiple expansion will be hard fought,” he writes. Mollins says he could become “more constructive” on Booking shares when European vaccination rates materially improve.
Expedia shares on Tuesday are up 0.3% to $176.63, while Booking is up a fraction at $2,351.84.
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