Expedia Upgraded to Buy by Jefferies Amid AI Optimism
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 hours ago
0mins
Should l Buy EXPE?
Source: CNBC
- Rating Upgrade: Jefferies upgraded Expedia's rating from hold to buy and raised its price target from $240 to $300, implying a roughly 32% upside from Friday's close, reflecting a positive outlook on the company's future performance.
- AI Potential: Analyst Colantuoni highlighted that artificial intelligence could serve as a tailwind for Expedia, improving recommendation engines, reducing customer acquisition costs, enhancing product velocity, and lowering customer service expenses, thereby driving long-term growth.
- Competitive Advantage: Despite internet stocks declining approximately 30%, Expedia is viewed as a beneficiary of the proliferation of AI tools, particularly as its marketing scale positions it favorably in a fragmented hotel industry for traffic acquisition.
- Foundation for Sustainable Growth: Over the past two years, Expedia has made significant strides in key product investments and management priority refreshes, laying a foundation for more sustainable growth, even as Wall Street's overall consensus remains cautious.
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Analyst Views on EXPE
Wall Street analysts forecast EXPE stock price to rise
28 Analyst Rating
9 Buy
19 Hold
0 Sell
Moderate Buy
Current: 225.810
Low
220.00
Averages
284.79
High
360.00
Current: 225.810
Low
220.00
Averages
284.79
High
360.00
About EXPE
Expedia Group, Inc. is an online travel company. The Company’s segments include B2C, B2B, and trivago. The B2C segment provides a full range of travel and advertising services to its worldwide customers through a variety of consumer brands including: Expedia.com, Hotels.com, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers, CheapTickets, Hotwire.com and CarRentals.com. The B2B segment fuels a wide range of travel and non-travel companies, including airlines, offline travel agents, online retailers, corporate travel management and financial institutions, who leverage travel technology and tap into its diverse supply to augment their offerings and market Expedia Group rates and availabilities to their travelers. Its trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch Websites. The trivago is its majority-owned hotel metasearch company, based in Dusseldorf, Germany.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Performance: Expedia Group shares increased by 2.2% following a positive upgrade from Jeffries.
- Analyst Upgrade: Jeffries has upgraded Expedia Group's stock rating to "Buy," contributing to the rise in share value.
See More
Jefferies Upgrades Expedia and Instacart on AI Potential
- Rating Upgrade: Jefferies analyst John Colantuoni upgraded Expedia (EXPE) and Instacart (CART) to a Buy rating, viewing the recent stock sell-off as a buying opportunity, which reflects market recognition of the AI potential for both internet companies.
- AI Potential Analysis: The analyst noted that OpenAI's shift towards advertising instead of direct checkout, along with Google's commitment to remain a source of referral traffic, indicates that large internet players will benefit from the evolution of large language models (LLMs), thereby consolidating market share.
- Price Target Setting: Jefferies set a price target of $300 for Expedia, implying a ~14X 2027 GAAP P/E, while Instacart's target was set at $45, equating to a 15X 2027 GAAP P/E, showcasing optimism about future growth for both companies.
- Stock Price Reaction: Following Jefferies' report, Expedia's shares rose 2.7% in premarket trading, while Instacart increased by 1.4%, reflecting a positive market response to the analysts' outlook.
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