Trade Synopsis: Long Expedia
Trade Recommendation: Long Expedia (Bloomberg Code EXPE US) (CMP 144), TP 160 & SL 130.
Expedia delivered objectively strong 2Q results as Vrbo returned to growth to exit the quarter, Brand Expedia grew bookings nearly 20% Y/Y, and B2B bookings grew 20%, all supporting 10% Y/Y nights growth in the quarter, 3% ahead of the Street, while also ahead of Buy-side pessimistic estimates. Our target price at $160 based on ~15.5x our 25 GAAP EPS estimates. More over Expedia's B2B portfolio is significantly undervalued in our view. We believe current strong wealth effect in middle class US households augurs well for Expedia’s core customer target. US retail sales has been holding well & US consumer spending has remained strong even at high real neutral rates. With Fed’s 50 bps cut and likely 125 cuts in total by Mar’25, we expect US consumer spending to remain resilient supported by strong wealth effect of US equities. Hence both from a macro & company specific point of view, Expedia looks well set to reach 160 levels from CMP of 144.
For detailed trade recommendation report, please read the below report in our trade recommendation section:
https://macro-spectrum.com/trade-recommendation/long-expedia
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