Jefferies Raises Price Target on Expedia (EXPE), More Growth and Upside Still Capable

July 29, 2011 1:13 PM EDT
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Price: $119.99 +0.06%

Rating Summary:
    29 Buy, 17 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Jefferies is reiterating its Buy rating on shares of Expedia (NASDAQ: EXPE) and is raising its price target from $31 to $35 following the release of its Q2 results.

The company released its Q2 results with $1.023 billion in revenue and EPS of $0.55, well above the Street expectations of $960 million and $0.49.

Total revenue grew 23 percent year-over-year as TripAdvisor experienced a 35 percent revenue increase year-over-year. The firm comments that, "Google's (Nasdaq: GOOG) recent move to exclude reviews from TripAdvisor and other sources is an incremental positive for TripAdvisor, in our view.

Jefferies believes that as EXPE initiates some of the same changes in which has made to its site, which are expected to occur in Q3 and Q4, the company will be able to see accelerated booking growth. experienced booking growth of 53 percent year-over-year following the changes, up from its previous growth of 39 percent.

The firm is increasing its 2011 and 2012 EPS estimates from $1.89 and $2.10 to $1.97 and $2.25. It is also raising its revenue estimates for 2011 and 2012 from $3.85 billion and $4.17 billion to $4 billion and $4.38 billion. Jefferies notes that a ramp up in the Getaways partnership with Groupon may bring an upside to their estimates.

For more ratings news on Expedia click here and for the rating history of Expedia click here.

Shares of Expedia closed at $28.99 yesterday.

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