Deutsche Bank Comments on Expedia's (EXPE) Q4, Maintains Hold Rating
Deutsche Bank maintained a Hold rating on Expedia (NASDAQ: EXPE) with a price target of $78. The stock stock is poised to open lower after reporting Q4 results.
Commenting on developments, analyst Ross Sandler said, "Expedia reported a “miss-and-lower” quarter in 4Q with revenue and EBITDA 1% and 8% below consensus, mostly a result of weakness at eLong. The company guided 2015 EBITDA to 10%-15% excluding eLong, which bakes in 5-points of FX headwind. If we back out our estimates for Travelocity and Wotif contribution, it implies core organic growth going from ~14% in 2014 to 5%-10% in 2015, which likely proves conservative. Further, the losses at eLong should escalate meaningfully in 2015 which pressures the SOTP math, unless EXPE can monetize the asset."
"We trim our consolidated EBITDA for 2015 by 10%, implying core growth of 14% and eLong of (-$120m), our price target is $78 based on consistent multiples on 2016 estimates," he added.
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Shares of Expedia closed at $88.00 yesterday.