TripAdvisor (TRIP) Stock On Way to $51, Says Analyst

December 24, 2012 11:06 AM EST
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Price: $51.85 --0%

Rating Summary:
    2 Buy, 34 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 19 | Down: 13 | New: 9
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Shares of TripAdvisor (Nasdaq: TRIP) are higher by 57 percent year-to-date, and analysts at Needham and Company see more upside. In fact, the firm is calling for revenue and earnings well above consensus, in part because of hotel trends away from online travel agenies (OTA).

Needham analysts point out that in 2011, 76 percent of online bookings for independent (i.e., non-branded) hotels came from the OTAs vs 24 percent from the hotels' own websites, according to the HSMAI Foundation.

"OTA commissions are high, typically around 20%," noted analyst Laura Martin. This could help fuel ongoing trends away from OTAs toward TripAdvisor.

Pricing isn't TRIP's only advantage. Additional advantages include size relative to competitors and its perception as independent.

"Customers can get reviews and ratings, and TRIP prides itself on being independent: We believe consumers perceive TRIP as impartial, whereas we believe many of its competitors are perceived as being promotional."

Needham & Company reiterated a Buy rating on TripAdvisor (NASDAQ: TRIP) with a price target of $51.00 (from $38.00).

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 $41.97 yesterday.

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