BMO raises Expedia stock price target to $190 on cost efficiencies

On Friday, BMO Capital Markets updated its outlook on Expedia Group Inc. (NASDAQ:EXPE), increasing the price target from $165.00 to $190.00, while maintaining a Market Perform rating on the shares. The revision reflects an anticipated improvement in the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) due to ongoing cost leverage. According to InvestingPro data, Expedia’s current EBITDA stands at $1.72 billion, with analyst targets ranging from $163 to $250, suggesting mixed views on the stock’s potential.

The firm’s analyst noted a slight downward revision in the 2025 gross bookings estimate for Expedia, attributed to foreign exchange considerations. However, the expected EBITDA for the company was adjusted upward by 2%, suggesting that cost management initiatives are bearing fruit. The new 2025 EBITDA margin forecast stands at 21.9%, compared to the previous estimate of 21.4% for 2024. InvestingPro data reveals an impressive gross profit margin of 89.19%, indicating strong operational efficiency. Get access to 10+ more exclusive ProTips and comprehensive financial metrics with InvestingPro.

The analyst also highlighted competitive challenges faced by Expedia’s Vrbo and Hotels.com, particularly against market leaders Airbnb and Booking (NASDAQ:BKNG).com, both in the United States and internationally. Despite the competitive landscape, the increase in Expedia’s target price is based on the anticipated greater cost efficiencies.

The report cautioned that potential increases in marketing expenditures could impact the company’s profitability. The implication is that while Expedia is currently expected to benefit from cost efficiencies, there is a risk that higher marketing costs could offset these gains.

Expedia’s stock price target adjustment by BMO Capital Markets follows a comprehensive analysis of the company’s financial outlook and market position. The update provides investors with the latest expectations from BMO regarding Expedia’s performance in the near future.

In other recent news, Expedia Group Inc. has seen a series of price target increases from several analyst firms following its robust fourth-quarter performance. TD Cowen raised its target from $176 to $215, citing a significant increase in booked nights and gross booking value. Analyst Kevin Kopelman also highlighted the company’s B2B strength and expected top-line growth.

Similarly, Benchmark analysts lifted their price target from $200 to $225, maintaining a Buy rating and commending the reinstatement of the company’s dividend and ongoing stock buyback program. They also noted the appointment of e-commerce veteran Scott Schenkel as the new CFO, expecting him to provide stable financial guidance.

Cantor Fitzgerald increased its price target from $180 to $210, maintaining a Neutral rating and emphasizing the company’s commitment to controlling fixed costs. Mizuho (NYSE:MFG) Securities raised its target from $180 to $195, applauding the successful execution of strategies across Expedia’s brands and the promising projections for FY25 EBITDA margins.

Lastly, Goldman Sachs raised its price target for Expedia to $241, maintaining a Buy rating. The firm noted several positive developments in Expedia’s recent earnings report, including exceeding gross bookings, revenue, and adjusted EBITDA estimates. Analyst Eric Sheridan highlighted the recovery and growth of Vrbo and Hotels.com, as well as the robust international demand in the B2B segment.

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