BMO Capital lifts Expedia stock price target to $190, keeps rating

On Monday, BMO Capital Markets updated its outlook on Expedia Group Inc. (NASDAQ:EXPE), raising the price target from $165.00 to $190.00. The firm maintained its Market Perform rating on the travel platform’s stock, which currently trades near $203, approaching its 52-week high of $205.12. According to InvestingPro data, the stock has delivered an impressive 55% return over the past six months.

According to BMO Capital’s analyst, the revision in the price target reflects a combination of factors. While the gross bookings estimate for 2025 has been slightly reduced due to foreign exchange considerations, the expected EBITDA has been increased by 2% because of ongoing cost leverage. InvestingPro analysis reveals the company maintains impressive gross profit margins of 89.5%, supporting its operational efficiency.

The analyst noted that Expedia’s Vrbo and Hotels.com segments are facing significant competition, particularly from Airbnb and Booking (NASDAQ:BKNG).com, which hold strong leadership positions both in the U.S. and on an international level. Despite this competitive landscape, the increase in Expedia’s target price is attributed to improved cost efficiencies projected for 2025, with an EBITDA margin of 21.9% compared to 21.4% in 2024. The company’s current EBITDA stands at $1.83 billion, demonstrating its ability to maintain profitability in a competitive market.

However, the analyst also cautioned that potential increases in marketing expenditures could impact the company’s profitability. The need to invest in marketing to compete effectively with industry leaders could potentially offset the benefits gained from cost efficiencies.

The price target adjustment by BMO Capital Markets indicates a recognition of Expedia’s efforts to manage its costs and improve its margin outlook. Even so, the firm’s Market Perform rating suggests a neutral stance on the stock, implying that the shares are expected to perform in line with the broader market.

In other recent news, Expedia Group Inc has been the focus of several analyst reports. DA Davidson lifted its price target for Expedia to $205, maintaining a neutral rating, following the company’s strong fourth-quarter performance. This included a 9% year-over-year growth in its B2C operations and a 24% increase in its B2B segment.

Mizuho (NYSE:MFG) Securities also raised its price target for Expedia to $195, citing the company’s effective strategic initiatives and the success of its One-Key initiative. BMO Capital Markets increased its price target for Expedia to $190, attributing this to anticipated improvements in the company’s earnings due to cost leverage.

TD Cowen lifted its price target for Expedia to $215 after the company’s fourth-quarter results significantly exceeded expectations. The analyst cited strong consumer demand and effective promotional activities as key drivers of this success.

Benchmark analysts raised their price target for Expedia to $225, maintaining a buy rating on the stock. They highlighted the reinstatement of the company’s dividend and the ongoing stock buyback program as positive developments.

These recent developments reflect analysts’ recognition of Expedia’s solid performance and potential for sustained growth.

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