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Investing.com - Mizuho upgraded TripAdvisor (NASDAQ:TRIP) from Underperform to Neutral on Friday, raising its price target to $17.00 from $14.00. TripAdvisor is currently trading at $14.78, with analyst targets ranging from $13 to $25, suggesting potential upside according to InvestingPro data.
The upgrade follows TripAdvisor’s implementation of an $85 million cost reduction plan, which represents approximately 25% of the company’s projected 2025 EBITDA, according to Mizuho. The company’s current EBITDA stands at $167 million for the last twelve months, with InvestingPro analysis showing the stock appears undervalued compared to its Fair Value.
The research firm cited TripAdvisor’s strategic organizational pivot toward its faster-growing Experiences segment and away from its weaker hotel segment as a key factor in the improved outlook.
Mizuho also noted that TripAdvisor has initiated a strategic review of its portfolio, specifically TheFork, which the firm estimates could be worth up to $5 per share.
The upgrade additionally recognizes TripAdvisor’s more aggressive approach to AI product development, including plans to release a new AI-native product in the coming weeks, which Mizuho views as "an interesting call option."
In other recent news, TripAdvisor reported third-quarter earnings that surpassed analyst expectations, with adjusted earnings per share reaching $0.65, exceeding the consensus estimate of $0.56. However, the company’s revenue for the quarter was $553 million, slightly below the analyst estimate of $562.92 million, though it marked a 4% increase compared to the previous year. TripAdvisor has also announced a strategic realignment of its operating model to focus on an experiences-led growth strategy, aiming for at least $85 million in annualized gross cost savings by 2027. This shift is designed to bolster TripAdvisor’s leadership in the experiences segment, which now accounts for nearly 60% of its revenue.
Additionally, Bernstein has reiterated its Outperform rating for TripAdvisor, maintaining a price target of $20.00. The firm highlights the benefits of the company’s integration strategy, particularly the decision to integrate Viator into the core Brand TripAdvisor business. This move is expected to streamline operations and create significant synergies. These developments reflect TripAdvisor’s ongoing efforts to strengthen its market position and enhance operational efficiency.
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