Bernstein: 'Trip.com Group Limited (TCOM) Our Top Pick'

Bernstein SocGen Group analyst Boris Van reiterated an Outperform rating and $75.00 price target on Trip.com Group Limited (NASDAQ: TCOM).

The analyst commented: "TCOM as our top pick: We prefer TCOM at this juncture, with valuation nearing 13x forward P/E, it is undervalued even on a more conservative forecast. The stock seems to be pricing in a drastic revision to forecasts from potential macro pressures. We like TME as well as a stable earner and its stable earnings stream might appeal to some. However, even after the latest declines valuation is fair for its EPS profile. Baidu we fear has most exposure of macro risks which could further derail its AI monetization story.

For TCOM, macro hit would likely result in more downtrading than reduction of travel, driving up domestic travel to offset drop in outbound and international Trip.com: In our modeling of a 1% GDP hit, we model 5% reduction in outbound and 2% reduction in hotel growth on downtrading, resulting in growth going from 16 to 14% for the FY. Hotel growth to see some weakness through outbound travel volumes that convert to domestic travel thus offsetting some impact.~1.5% reduction in revenue."

For an analyst ratings summary and ratings history on Trip.com Group Limited click here. For more ratings news on Trip.com Group Limited click here.

Shares of Trip.com Group Limited closed at $52.21 yesterday.

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