Pacific Crest Upgrades Expedia (EXPE) to Overweight
- Wall St. stock futures fall after Italy referendum
- Oil tops $55 for first time in 16 months as OPEC deal fuels buying
- Consolidated Communications (CNSL) to Acquire FairPoint Communications (FRP) in $1.5B Deal
- Burberry rejects multiple takeover offers from Coach: Financial Times
- Trump picks ex-rival Carson to head housing department
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
Pacific Crest upgraded Expedia (NASDAQ: EXPE) from Sector Weight to Overweight with a price target of $160. Analyst Brad Erickson noted positive HomeAway checks, along with favorable risk/reward.
"Conversations with property owners indicate overall high satisfaction with the HomeAway platform, very limited desire and ability to move to competing platforms and greater confidence in passenger fee implementation and take-rate levels already being achieved. We think this is under-appreciated in shares at current levels," said Erickson.
"We are establishing EBITDA estimates by segment, enabling a sum-of-the-parts valuation. We are also making an appropriate, albeit slight, upward adjustment to our 2016 and 2017 EBITDA estimates via D&A; our EPS estimates are unchanged. Additionally, we are establishing 2018 revenue, EBITDA and EPS estimates. We are forecasting a 21% three-year revenue CAGR from 2015-2018; we expect some leverage from lower tech & content and G&A costs to drive faster EBITDA and earnings growth of 27% and 28%, respectively," continued the analyst.
Erickson concluded, "Given some mixed hotel data during the quarter, we are not making a call on the quarter; however, HomeAway checks combined with our view of Expedia having multiple levers to support growth over the next few years give us incremental confidence in the story despite the recent mini-run in the stock. We are buyers and see upside to $160 based on a sum-of-the-parts analysis with a bull case approaching $200."
Shares of Expedia closed at $124.69 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Credit Suisse Upgrades National Beverage (FIZZ) to Outperform
- Credit Suisse Upgrades HollyFrontier (HFC) to Outperform
- Pivotal Research Downgrades Kroger (KR) to Hold
Create E-mail Alert Related CategoriesAnalyst Comments, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesPacific Crest Securities, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!