UPDATE: Guggenheim Downgrades TripAdvisor (TRIP) to Sell
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(Updated - May 16, 2018 6:20 AM EDT)
(updated to add analyst comment)
Guggenheim downgraded TripAdvisor (NASDAQ: TRIP) from Neutral to Sell with a price target of $40.00.
Analyst Jake Fuller cites three key themes for the downgrade:
- OTAs are tilting from room nights to margin, which has undermined meta channel growth and may not be done;
- With TRIP cutting ad spend, competitors spending more, and GOOGL (NC, $1,084.87) ramping, we see a tough competitive backdrop;
- Shares have rallied post print (+25% since 5/8 vs. S&P 500 +1%) and we see valuation as aggressive for a company with no record of growth and facing competitive pressure and potential estimate risk if OTA rationalization efforts continue.
Shares of TripAdvisor closed at $48.37 yesterday.
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