TripAdvisor (TRIP) upgraded at BofA on accelerating Viator growth

TripAdvisor (NASDAQ: TRIP) was double upgraded to Buy from Underperform by BofA analyst Nat Schindler, who also raised the firm's price target on the stock to $39 per share from $19.

The upgrade has pushed TRIP shares more than 4% higher during Wednesday's session.

The analyst said in a research note that they are upgrading the stock based on accelerating growth in Viator (experiences bookings), with strong US demand and European recovery.

"Viator's revenue growth vs 2019 has far exceeded TRIP's total revenue growth vs 2019 over the last few quarters, and in 3Q22 Viator contributed 38% of TRIP's total revenue vs. only 18% in 2019," wrote Schindler.

The analyst also pointed to app data from Sensor Tower which suggests strong growth in Viator app downloads and usage.

"Mgmt. has highlighted continued focus on brand marketing, especially in Viator, which could keep near-term profit margins in check, but we are positive on Viator's longer-term growth trajectory," Schindler added.

"We think that TRIP's Viator is making strong in-roads in an otherwise underpenetrated online Experience booking market. We remain cautious on meta-search growth, but inflation-led customer price sensitivity could be an advantage."

By Sam Boughedda

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