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Expedia Stock Tanks After Q4 Earnings, CEO Departure: ‘Solid Execution Is Critical’

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Shares of Expedia Group Inc EXPE were tanking Friday after the travel company reported fourth-quarter earnings and announced a new CEO.

The results came amid an exciting earnings season. Here are some key analyst takeaways from Expedia’s quarterly report. 

BofA Securities On Expedia Group

Analyst Justin Post downgraded Expedia from Buy to Neutral while lowering the price target from $181 to $156.

Expedia reported fourth-quarter bookings of $21.7 billion, short of Street expectations of $22.2 billion, “with pressure on airline & Vrbo bookings,” Post said in the downgrade note.

Expedia’s revenue beat was due to “lodging mix driving higher take rates,” while the EBITDA was also slightly above Street expectations, he added.

“Mgmt. guided to 1Q bookings growth at low to mid-single digits, below Street at 7%, on tougher comps, air bookings pressure, and slow Vrbo recovery post re-platforming.” 

Piper Sandler On Expedia Group

Analyst Thomas Champion reiterated an Overweight rating while reducing the price target from $180 to $175.

Expedia’s stock came under pressure on weaker results for the fourth quarter and the transition announcement for CEO Peter Kern, Champion said.

“We continue to like the efficiency focus & B2B is growing 25%+ y/y,” the analyst wrote. “We still see opportunity for multiple expansion vs travel peers as EXPE executes on a technology transformation and re-tooling of the rewards program,” he added.

JPMorgan On Expedia Group

Analyst Doug Anmuth reaffirmed a Neutral rating while raising the price target from $115 to $136.

“EXPE reported 4Q results mostly in line with Street expectations across key metrics, but likely light of higher buyside expectations, coupled with a mixed outlook across 1Q & 2024,” Anmuth wrote in a note.

“We come away incrementally positive on the progress of the transformation, improvements & streamlining of the tech stack, further margin expansion, and a more upbeat tone to go on the offensive, but solid execution is critical while macro uncertainty remains an overhang,” he said.

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Goldman Sachs On Expedia Group

Analyst Eric Sheridan reiterated a Buy rating while lifting the price target from $190 to $195.

The fourth-quarter results were “the culmination of a year in which Expedia underwent a broad transformation of de-emphasizing certain brands, transitioning its three main brands onto to one technology platform, introducing the One Key loyalty/reward program and building scale in its B2B operations,” the analyst said. 

“In our view, EXPE mgmt’s overall characterization of the potential for growth, margin, and shareholder returns matched pre-earnings investor expectations.” 

Check out other analyst stock ratings.

DA Davidson On Expedia Group

Analyst Tom White reaffirmed a Neutral rating while raising the price target from $125 to $152.

Expedia’s quarterly results were “mixed but generally decent,” with a slight miss in gross bookings, mainly due to weakness in Air, White said.

“Air’s lower levels of monetization vs. Lodging bookings means that the impact to EXPE’s 4Q revenues and EBITDA was less pronounced, with 4Q consolidated revs and adj. EBITDA coming in modestly above consensus,” he added.

Booked room nights grew by 9% year-over-year, with lodging bookings up 8% and hotel bookings up 13%, the analyst further stated.

Oppenheimer On Expedia Group

Analyst Jed Kelly maintained an Outperform rating and $175 price target.

Expedia’s 2024 EBITDA guidance implies around 75 basis points of margin expansion “on higher operating efficiencies,” Kelly said.

The stock declined by 13% in after-hours trading on the announced CEO departure in May and “short-term profit taking on an in-line 4Q,” the analyst said.

“Guidance implies revenue, ~+10% y/y, accelerating sequentially from 1Q (toughest comp) on higher Vrbo conversion, B2B momentum, and re-entering critical Int’l markets.” 

RBC Capital Markets On Expedia Group

Analyst Brad Erickson reiterated a Sector Perform rating and $155 price target.

“EXPE’s Q4 was challenging with a slight bookings miss, unfavorable ADR mix, weak Q1 guidance implying a steeper back half, low visibility on what will drive that improvement and lastly, a CEO transition,” Erickson wrote in a note.

“Positively, the company spoke to stable market share continuing, getting more aggressive on Vrbo and still having more room to pull cost out of the P&L.” 

Wedbush On Expedia Group

Analyst Scott Devitt reaffirmed a Neutral rating and $130 price target.

“Despite the weaker than expected outlook for 1Q, management still provided a framework for the full year that was in line to slightly above consensus, suggesting bookings growth will meaningfully accelerate throughout the year,” Devitt said.

“Expedia also announced that CEO Peter Kern, who oversaw the company’s recent transition, will be stepping down from the CEO role to be replaced by Ariane Gorin, President of Expedia for Business,” he added.

EXPE Price Action: Shares of Expedia Group were trading down 18.03% to $130.72 Friday. 

Photo via Shutterstock.

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