TripAdvisor (TRIP) PT Cut to $60 at RBC Capital

RBC Capital analyst Mark Mahaney cut his price target on TripAdvisor (NASDAQ: TRIP) to $60.00 (from $70.00) and reiterated a Sector Perform rating following Q1 results materially below expectations, but comments that the 2nd-half would be better.

commented, "TRIP posted Q1 results materially below expectations, but had stated that H2:16 should be better than H1:16 – consistent with mgmt’s commentary throughout the quarter. Ests come down, as does our price target as we wait for signs that the re-acceleration occurs. Instant Book made significant progress in its global rollout, and Mobile monetization is improving."

Key Items:

1) Margin De-leverage – of nearly 11% Y/Y was more than the 5% RBC/Street modeled.

2) Declining Revenue Growth – 5% Y/Y decline in Hotel Revenue Growth was down 9pts from Q4 on a 4pt easier comp. Revenue likely will improve in H2:16.

3) New Hotel Metrics – Management disclosed new TripAdvisor branded Hotel Clicks & Transactions, Hotel Display & Subscription and Other Hotel revenue categories.

4) Hotel Shopper Acceleration – Hotel Shoppers are the base of TRIP’s Revenue, and they grew 13% Y/Y to 143MM, a 3pt accel from Q4 on 4pt tougher comp – a positive d-point.

5) IB Roll-out Progress – Already in the U.S. and much of Europe, management expects IB to be rolled out to the rest of Europe, APAC and LatAm regions by the end of Q2. This is the second phase of management’s four phase plan to increase IB usage/monetization

The firm is lowering 2016 Revenue/EBITDA ests. by 5%/11%, respectively, to $1.51B and $411MM.

For an analyst ratings summary and ratings history on TripAdvisor click here. For more ratings news on TripAdvisor click here.

Shares of TripAdvisor closed at $63.13 yesterday.

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