Oppenheimer analyst Jed Kelly upgraded Expedia (NASDAQ: EXPE) to Outperform from Perform with a $120 per share price target in a note on Wednesday.

The analyst told investors the firm believes Expedia is not reflecting improvements to its unified tech stack.

"In the last 12 months, EXPE shares are down 48%, underperforming the S&P's 32%, and its current EV is now 11% below pre-COVID levels, despite our forecasts for '22E/' 23E EBITDA to be 115%/127% above '19 levels on structurally higher margins from successful cost-cutting execution," writes Kelly.

"Trading at 8x our' 23E EBITDA vs. its pre-COVID one-year average of ~10.6x, we believe the stock is largely discounting current macro headwinds but not reflecting improvements to EXPE's unified tech stack that we see equating to a higher mix from B2B and loyalty, two revenue channels carrying more consistent margin profile," he adds.

Expedia shares have jumped over 3.5% Wednesday.

In the note, the analyst also said Booking Holdings (NASDAQ: BKNG) is the firm's top pick in the near term as they view the company as "online travel's cleanest story" in a volatile market environment.

Furthermore, for Airbnb (NASDAQ: ABNB), he said the company is "supply-constrained relative to '19 and losing share to hotels."

By Sam Boughedda