According to an analyst at Evercore ISI, Expedia Group stock has more room to grow compared to Airbnb shares, which have seen solid gains this year.
Expedia Upgraded to Outperform
Mark Mahaney, in a research note, upgraded shares of Expedia (ticker: EXPE) to Outperform from In Line. He also increased his price target on the stock to $200 from $135. Mahaney stated that the revenue growth acceleration for Expedia is being driven by sustainable company initiatives and key development. These initiatives include improvements to online platforms and the launch of its One Key loyalty program, offering rewards to users of various Expedia brands.
Expedia recently reported third-quarter earnings and revenue that exceeded Wall Street’s expectations. The company also expects double-digit revenue growth for the year due to strong travel demand and consumer spending on experiences. As a result, Expedia shares have surged 52% this year and were trading at $134.33, up 3.5% on Friday.
Airbnb Downgraded, Still Faces Solid Year
On the other hand, Mahaney downgraded shares of Airbnb (ABNB) from Outperform to In Line. However, he maintained the price target of $136 for the stock. Mahaney believes that the relative risk-reward outlook of Airbnb is less attractive compared to that of Expedia, particularly as the stock has appreciated close to their price target.
Airbnb shares have also seen a solid year, climbing 47% due to strong travel demand. However, the company provided fourth-quarter financial estimates that were lower than Wall Street’s expectations, negatively impacting the stock. In addition, management expressed concerns about the economic and geopolitical environment causing demand softness. Factors such as high inflation, interest rates, and the ongoing Middle East conflict have contributed to this sentiment.
Currently, shares of Airbnb are trading at $126.48, up 0.2%.
In conclusion, Expedia Group stock is expected to continue growing, driven by sustainable initiatives and positive market conditions. On the other hand, while Airbnb has experienced gains this year, its relative risk-reward outlook is not as attractive, considering the current economic and geopolitical environment.