Jefferies Upgrades Expedia and Instacart on AI Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 hours ago
0mins
Should l Buy EXPE?
Source: seekingalpha
- 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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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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- 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.
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- 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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- Rising Oil Prices: Crude oil prices surged over 2% to a three-week high due to disruptions in oil and gas flows through the Strait of Hormuz caused by the Iran conflict, which could negatively impact global economic growth.
- Weak Manufacturing Activity: The Dallas Fed manufacturing activity index dropped from -0.4 to -0.2, falling short of the expected increase to 2.0, suggesting challenges in economic recovery that may influence future policy decisions.
- Escalating International Tensions: U.S. and Israeli military actions against Iran have intensified, with 3,500 sailors and Marines deployed to the Middle East, potentially leading to further volatility in energy markets and impacting global supply chains.
See More
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- Market Gains: The S&P 500 Index rose by 0.58%, the Dow Jones Industrial Average increased by 0.91%, and the Nasdaq 100 Index climbed by 0.30%, reflecting a positive market sentiment amid expectations that the Fed may keep interest rates unchanged.
- Declining Bond Yields: The 10-year Treasury note yield fell by 10 basis points to 4.33%, driven by concerns that the ongoing war in the Middle East could lead to a fuel shortage, potentially hindering global economic growth and influencing the Fed's future rate decisions.
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- Trump's Comments Impact: Trump's statement about serious discussions with Iran led to a rise in the S&P 500, but Jim Cramer cautioned investors against rushing to buy, as Trump's claims are often later denied by Iran, indicating market uncertainty.
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See More
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- Market Recovery: The S&P 500 Index rose by 0.42%, the Dow Jones Industrial Average increased by 0.64%, and the Nasdaq 100 Index gained 0.32%, indicating a short-term market rebound amid escalating tensions in the Middle East, as investor confidence in future economic growth shows signs of recovery.
- Declining Bond Yields: The 10-year T-note yield fell by 8 basis points to 4.35%, reflecting market concerns that the ongoing war in the Middle East may lead to fuel shortages, thereby suppressing inflation expectations and potentially keeping the Fed from raising interest rates in upcoming meetings.
- Rising Oil Prices: Crude oil prices surged over 1% to a three-week high due to Iranian attacks on shipping, with fears that the closure of the Strait of Hormuz could disrupt global oil supplies, potentially driving prices to exceed the 2008 record high.
- Energy Infrastructure Damage: The International Energy Agency reported that more than 40 energy sites across nine Middle Eastern countries have been severely damaged, which could prolong disruptions to global supply chains after the war ends, further impacting international market stability.
See More
EXPEDIA GROUP STOCK INCREASES 2.2% FOLLOWING JEFFERIES UPGRADE TO BUY
- 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.
See More
