Expedia may have more room to run heading into 2025, according to Bank of America. The bank upgraded the online travel stock to buy from neutral and upped its price target to $221 from $187, which reflects more than 22% upside from Tuesday’s close. Revenue per available room and Bank of America “aggregated credit and debit card data show early signs of improving trends for US travel,” analyst Justin Post wrote to clients, calling Expedia his “top Internet value stock.” When it comes to RevPAR data for the fourth quarter, the analyst noted that the U.S. travel market has increased to 3.6% quarter to date, saying that could be an early sign that leisure spend in the country may be “normalizing.” On top of that, quarter-to-date BAC card data for the period reveals that air and hotel spending has “modestly” improved. All in all, the market could actually be “moving past a trough,” he said. Looking ahead to 2025, Post pointed to potential optimism surrounding CEO Ariane Gorin, who assumed the role in May 2024, as a possible positive catalyst for the stock. He also cited additional deal speculation with mobility companies for ride-sharing and restaurant delivery apps as well as the potential for more cost-cutting initiatives as other possible catalysts for growth. “Expedia’s costs vs its closest peer Booking remain elevated in the technology and marketing lines, and EBITDA margins are lower,” the analyst also said. “With Booking announcing further cost cutting actions into 2025, we think there could be incentive for Expedia to find additional cost savings around tech and content (AI driven coding efficiencies), customer service (AI), and marketing efficiencies (ad creative, targeting).” While Post’s call is among the 11 analysts covering the name with a buy or strong buy rating, the majority of Wall Street has taken a neutral stance. In fact, 27 out of the 38 total analysts have a hold rating, according to LSEG. The Street still sees some growth from here, however. As of Tuesday’s close, Expedia’s average target of $184.94 implies more than 2% upside potential. EXPE YTD mountain EXPE, year-to-date Shares gained about 3% in the premarket after the upgrade. This year, shares have risen around 19%.
