Expedia Group stock gained Wednesday morning after BofA Securities analysts boosted their outlook on the stock to buy from neutral.
BofA analyst Justin Post also raised his price target for Expedia to 221, from 187, in the client note early Wednesday. Post said aggregated credit card data was showing "early signs" of improving trends for U.S. travel demand.
"(Expedia's) U.S. bookings, reported online travel agency nights, and revenue per available room data had been trending at low single digits in 2024 and we are seeing early signs of modest improvement, which could suggest normalizing domestic leisure travel spend into 2025," Post wrote.
Post added that he was previously cautious because Expedia consumer-focused nights booking growth was growing slower compared to its larger competitor Booking Holdings, as well as the growth rate for Airbnb.
But, Post said, "we think trends can improve in 2025 on easy comps and improving positioning at Vrbo and Hotels.com."
On the stock market today, Expedia stock is up more than 3% at 186.25. Expedia Group includes Hotels.com, Vrbo, Orbitz and Expedia.com.
Expedia Stock: Up 20% This Year
Expedia stock entered trading Wednesday up roughly 20% on the year, compared to a 27% gain for the S&P 500. But much of Expedia's gain has come in recent weeks.
Expedia stock jumped 8% following its Q3 earnings report in early November. Shares rallied 18% overall for the month.
The travel firm's stock also got a boost in October on media reports that Uber had considered acquiring Expedia, though Uber's leadership tamped down the speculation by saying the company would focus on "organic growth"
But the year has been tough for Expedia overall, Post noted.
"Expedia had a difficult start to 2024, with VRBO missing expectations post tech re-platforming and declines in Hotel.com bookings on loyalty program changes," Post wrote. "To try to drive bookings, Expedia increased marketing spend and offered hotel and AA rate discounts, which affected revenue take rates and margins in 3Q'24."
The flip side of that is that Expedia has easier comparisons for upcoming quarters, Post noted.
Expedia also had a recent leadership change. Ariane Gorin took over as chief executive in May. That creates some uncertainty, Post noted, but also the potential that "better messaging/execution could drive longer term investors to revisit the stock."
Booking Stock Price Target Raised
The BofA note also weighed in on Booking stock and Airbnb. Post is neutral on both stocks.
He raised his price target on Booking stock to 5,522 from 4,850, citing recent cost-cutting initiatives the company announced.
Airbnb's price target was increased to 159 from 154, citing "modest nights upside (that) could be offset by FX pressure."
Expedia stock, meanwhile, is the fourth ranked stock in the Leisure-Travel Booking Group, according to IBD Stock Checkup. Expedia stock holds a strong Composite Rating of 94 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks typically have a Composite Rating of 90 or better.
Booking Holdings is the fifth ranked stock in the group, with a 93 IBD Composite rating. Airbnb stock, which has lost 2% year to date, ranks seventh with a 44 IBD Composite Rating.
The China-focused travel group Trip.com and India-focused MakeMyTrip lead the group.
