Expedia (EXPE) PT Raised to $265 at Benchmark

Benchmark analyst Daniel Kurnos raised the price target on Expedia (NASDAQ: EXPE) to $265.00 (from $215.00) while maintaining a Buy rating.

The analyst commented, "What a difference 3 months can make. What a difference 24 hours can make. After all of the data and wild swings in commentary and sentiment around the domestic travel environment in particular, Expedia (EXPE: Buy, PT to $265 from $215) capped off our earnings season with a (relative) bang, saying the magic words that sent investors in this crowded trade into euphoria: “since the beginning of July, we've seen an uptick in overall travel demand, particularly in the US. Based on our solid first half performance and these current trends, we're raising our annual guidance.” This particular combination was especially powerful given basically the same trend commentary from the others but combined with warnings around trends persisting or tougher 3Q comps (never mind that Expedia just took guidance to the woodshed last quarter, or that its tougher comps just come in 4Q rather than 3Q). And, even though it was somewhat expected, the margin guidance raise for the year put the recovery story right and long-term margin narrative back on the table. Rarely have we seen such enthusiasm for a 1% gross booking/revenue and 25bp margin increase in annual guidance, especially when the outlook is now 3-5% and 100bps, but we all know that the story is just as important as the journey. We will therefore give Expedia a real bottom-of-the-range travel EBITDA multiple of 9x to arrive at our new $265 price target."

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