Jefferies lifts Trip.com price target to $80, maintains Buy rating

On Tuesday, Jefferies increased its price target for Trip.com Group Limited (NASDAQ:TCOM) shares to $80 from the previous target of $77, reaffirming a Buy rating for the company. Currently trading at $67.10, Trip.com maintains strong financial health with an impressive gross profit margin of 81.25%. The adjustment follows Trip.com’s first-quarter earnings report, which showed revenue meeting analysts’ projections and non-GAAP operating profits exceeding expectations.

Trip.com’s management reported robust domestic travel activity during the Labor Day holidays and persistent positive trends in overseas markets. The company has experienced faster growth than the industry average in outbound travel, with revenue growing 19.73% over the last twelve months. The company anticipates further improvements in capacity by 2025. Additionally, significant growth is forecasted for international and inbound travel sectors.

According to Jefferies, Trip.com distinguishes itself as a comprehensive travel solution provider, with artificial intelligence enhancing the customer experience. The firm’s analysts express confidence in Trip.com’s potential for market share expansion and a strong long-term narrative.

The positive outlook from Jefferies reflects Trip.com’s solid performance and strategic positioning in the travel industry, which is showing signs of resilience and growth, particularly in the context of international travel trends and technology integration.

In other recent news, Trip.com Group Limited has reported a significant 72% year-over-year growth in earnings per ADS (EPADS) to CNY26.20, alongside a 15% increase in revenue to CNY53.3 billion. This growth was driven by a 25% rise in accommodation reservations and a 10% increase in transportation ticketing. Despite these positive results, CFRA downgraded Trip.com’s stock rating from Strong Buy to Hold, lowering the price target to $60, citing anticipated weaker consumer spending trends. In contrast, Jefferies maintained a Buy rating with a $77 price target, highlighting the potential benefits from increased domestic hotel and air ticketing revenue, as well as the integration of artificial intelligence to enhance user experience.

Bernstein also reiterated its Outperform rating with a $75 price target, emphasizing Trip.com’s resilience amidst macroeconomic pressures and potential for growth in domestic travel. Analysts at Bernstein noted that the company is undervalued, trading at approximately 13 times forward price-to-earnings, which remains attractive even with conservative earnings forecasts. The firm expects Trip.com to leverage increased domestic travel to offset challenges in the international travel market.

Meanwhile, Chinese stocks, including Trip.com, faced declines amid escalating trade tensions between the U.S. and China. Despite these market fluctuations, Bernstein and Jefferies continue to express confidence in Trip.com’s strategic direction and market position. These recent developments reflect varying perspectives on Trip.com’s future performance, with analysts focusing on both potential growth opportunities and external economic challenges.

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