Oppenheimer Remains Bullish on Expedia (EXPE) Following 3Q
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Oppenheimer reiterated an Outperform rating on Expedia (NASDAQ: EXPE), and raised the price target to $155.00 (from $145.00), following the company's 3Q earnings report.
Analyst Jed Kelly commented, "We're increasing our SOTP price target to $155 from $145 on roll-forward to '18 estimates and maintaining our Outperform rating following a solid 3Q, where Trivago/ HomeAway acceleration offset slowing OTA room nights, causing 3Q EBITDA to be 4%/2% above Opco/Street. We believe September's 14% organic room-night rate vs. 11% in 3Q, is sustainable over the medium term, from greater variable marketing exposure. Commentary around HomeAway's "early stages in performance advertising," positions the asset well for ~30% revenue growth in next two years, while driving consolidated marketing leverage, in our view. Furthermore, we see the pending Trivago IPO as EXPE's next immediate catalyst, based on greater disclosure allowing investors to better evaluate advertising efficacy. We remain buyers at current levels on multiple levers generating 25%-plus earnings growth over the next 2-3 years."
Shares of Expedia closed at $126.42 yesterday.
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