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On Thursday, Bernstein analysts maintained their Outperform rating and a $75.00 price target for Trip.com Group Limited (NASDAQ:TCOM) shares. The endorsement comes amidst observations of China’s travel sector, which is experiencing stable positive growth in travelers. This trend is supported by robust domestic travel and a resilient, albeit small, outbound segment that has withstood challenges from Southeast Asia (SEA) travel disruptions. The company’s impressive 81.25% gross profit margin and strong revenue growth of 19.73% in the last twelve months underscore its operational efficiency.
Trip.com’s stock is currently perceived as attractive based on its valuation and the anticipation of a stronger second half of 2025 for its international business. Despite an 18.73% decline year-to-date, analysts argue that Trip.com is reasonably priced when considering its growth profile, with a notably low PEG ratio of 0.23. Concerns regarding the company’s international business are expected to diminish as the year progresses. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.
Analysts highlighted that while hotel supply growth is under pressure due to the broader real estate issues, Trip.com’s resilient performance makes it a compelling choice for investors. The company’s stock is recommended for accumulation during periods of weakness, as it is believed that the latter part of the year will bring positive momentum for the international business segment. InvestingPro data reveals the company maintains excellent financial health with an overall score of 3.36 (GREAT), supported by strong cash positions exceeding debt levels.
The analyst’s commentary points to Trip.com’s favorable position despite the ongoing challenges in the travel industry, particularly in the SEA region. The company’s ability to maintain growth in the face of these difficulties has been noted as a testament to its resilience.
In conclusion, Bernstein’s analysts view Trip.com as their top pick in the travel sector, underlining the company’s potential for growth and recommending investors to take advantage of the current stock price. The firm’s sustained Outperform rating and price target suggest confidence in Trip.com’s performance and future outlook.
In other recent news, Trip.com Group Limited reported a 72% year-over-year increase in earnings per ADS (EPADS) to CNY26.20, with revenue rising 15% to CNY53.3 billion. This growth was driven by a 25% increase in accommodation reservations, a 10% rise in transportation ticketing, and a 7% increase in other business segments. Despite these positive results, CFRA downgraded Trip.com’s stock from Strong Buy to Hold, lowering the price target to $60, citing expected weaker consumer spending trends. Conversely, Jefferies maintained a Buy rating with a $77 price target, highlighting the benefits of increased domestic hotel and air ticketing revenue and the integration of artificial intelligence for enhanced user experience. Bernstein also reiterated an Outperform rating with a $75 target, emphasizing Trip.com’s potential to navigate macroeconomic challenges through increased domestic travel. Benchmark analysts echoed a positive sentiment, maintaining a Buy rating and an $80 price target, despite noting a contraction in operating profit margins due to international expansion efforts. These developments come amid broader market volatility, with Chinese stocks facing pressure from escalating trade tensions between the U.S. and China.
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