Shares of Expedia (NASDAQ: EXPE) are down over 6% in pre-open Friday after the company delivered weaker-than-expected Q2 results.

EXPE reported an adjusted loss of $169 million or $1.13 per share to miss on the analyst estimates of a loss of $0.65 per share. Revenue came in at $2.11 billion.

“The second quarter saw continued improvement in many global travel segments with North America in particular showing strength. Expedia Group benefited from strong vacation rental performance and improved conventional lodging, offset by continued softness in international travel, corporate travel, and relatively high consumer interest in smaller markets and lower-end accommodations. While that strength has continued into Q3, recent Covid variant news around the world continues to create uncertainty in the travel industry,” said Vice Chairman and CEO, Peter Kern.

Morgan Stanley analyst Brian Nowak lowered the price target to $190.00 per share from $200.00 on the EW-rated stock.

“We attribute the potential slower room night recovery to EXPE's lower exposure to US small cities and Europe. Bigger picture, EXPE remains a name that will be driven by durable incremental share gains (vs offline channels and online competitors) and the ultimate potential size of the company’s ‘22/’23 bookings and earnings power,” Nowak wrote in a note sent to clients.

“We lower our EXPE '21/'22gross bookings estimates by 6%/5% given the forward commentary regarding the negative impact of the Delta variant on July trends, with July down vs. the peak in June,” the analyst adds.

BofA analyst Justin Post noted a continuation in the recovery but July slowdown has pushed the company to miss on the consensus. He went to $191.00 per share from $210.00 on the price target but remains bullish and reiterated a “Buy” rating.

“Delta remains a risk, and we are disappointed with accommodation/air mix disclosure, but think Expedia’s 2Q room night booking trends were likely in the mid-teens and close to Booking. Overall, we are constructive on Expedia given: 1) signs of strong travel demand when cases fall, 2) potential for bigger earnings growth than peers from cost cutting when travel normalizes; 3) Attractive implied core OTA valuation (with VRBO potentially growing faster than Airbnb in 2021); and 4) Potential multiple expansion as Street looks forward to strong 2022/2023 growth,” Post further adds.