BMO Capital Markets analyst Brian J. Pitz is evaluating the future potential of online travel stocks and has initiated coverage on various companies.
In his assessment, Pitz initiated coverage on Airbnb IncABNB at a Market Perform rating and set a price target of $134.
The analyst anticipates an uphill battle for Airbnb due to an adverse regulatory environment, which could significantly impact its revenues. Pitz warns of a potential revenue risk of up to $1 billion, as stricter regulations across different cities could affect short-term rentals.
Pitz also forecasts increased volatility in the travel sector, especially between the current period and February, which are the initial indications for Spring/Summer 2024 bookings.
The analyst projected revenue of $9.844 billion for FY23, $10.987 billion for FY24, and $12.207 billion for FY25.
Booking Holdings Inc
Pitz initiated coverage on Booking Holdings IncBKNG at an Outperform rating, setting a price target of $4,150.
He touts the company’s Genius Loyalty program and the accelerated growth initiatives of Connected Trip, which are expected to position the company favorably for gaining wallet share in 2024 and beyond.
Furthermore, Pitz believes that Booking Holdings is set to benefit the most from the ongoing travel trend in 2024, with potential upside from an Asian recovery.
Pitz estimates revenue of $21.236 billion for FY23, $23.228 billion for FY24, and $25.015 billion for FY25 for Booking Holdings Inc.
Expedia Group Inc
The analyst also initiated coverage on Expedia Group IncEXPE at an Outperform rating, along with a price target of $181.
Pitz highlights Expedia’s full migration of Vrbo to its front-end stack with core Expedia and Hotels.com in Q4 FY23, offering a broader range of options for travelers.
He emphasizes that these investments, in combination with marketing efforts behind Vrbo, should outperform the Street’s forecast for 2024.
Overall, Pitz states that Expedia is well-positioned to capitalize on an enhanced customer experience, thanks to its diverse supply, integrated tech stack, and the introduction of One Key in July 2023 to boost loyalty value.
The analyst estimates revenue of $12.7 billion for FY23, $13.4 billion for FY24, and $14.2 billion for FY25 for Expedia Group Inc.
TripAdvisor Inc
Pitz initiated coverage on TripAdvisor IncTRIP at a Market Perform rating, setting a price target of $20.
He notes that TripAdvisor’s Hotel Meta Search offering faces competitive pressure from Google, but he expects recent product launches to accelerate the full-funnel travel competitive environment.
Given the scale of the company’s Viator and TUI experiences, the analyst believes there is potential for strategic M&A in the future.
In particular, Pitz forecasts that the TUI Musement segment will generate revenue of approximately $778 million in 2023.
He estimates revenue of $1.8 billion for FY23, $1.9 billion for FY24, and $2.0 billion for FY25 for TripAdvisor Inc.
Regarding the stock prices, BKNG shares are up 0.49% at $3,479.92, and EXPE are higher by 0.73% at $150.78, while ABNB is down 1.06% at $138.60, and TRIP is down 5.2% at $20.25 on the last check Tuesday.
Photo via TripAdvisor