JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Investing.com - Morgan Stanley (NYSE:MS) has reiterated an Overweight rating on Trip.com Group Limited (NASDAQ:TCOM) with a price target of $78.00. The company, currently valued at $40.3 billion, maintains a "GREAT" financial health score according to InvestingPro analysis, with strong buy consensus from analysts. The stock currently appears undervalued based on InvestingPro’s Fair Value model.
The firm believes Trip.com’s overseas investment strategy is rational rather than aggressive, based on return on investment considerations across different markets. Morgan Stanley notes that while Trip.com has strong product competitiveness, there remains a gap between its product leadership and its low-to-mid-single-digit market share in the Asia-Pacific market. This expansion strategy is supported by impressive gross profit margins of 81% and robust revenue growth of nearly 17% over the last twelve months.
Trip.com is already profitable in regions such as Hong Kong and Singapore, while continuing to grow market share by single digits in Thailand, North Asia, Japan, and Korea. The firm highlights that most incremental margin for Asian countries is positive, suggesting that additional market share gains should eventually drive margins to breakeven.
In Europe and the Middle East, Trip.com remains in an early stage of development, primarily reliant on ticket sales from its Skyscanner platform. Morgan Stanley indicates that current marketing investments should yield long-term growth and profitability improvements by acquiring more mobile users and enhancing brand recognition.
In other recent news, MakeMyTrip Limited announced a share repurchase agreement with Trip.com Group Ltd, planning to buy back a portion of its Class B shares. This move is part of a larger strategy involving a proposed primary offering of 14 million ordinary shares and a private offering of convertible senior notes amounting to $1.25 billion. The funds from these offerings will be used to finance the share buyback from Trip.com. Jefferies has maintained its buy rating on Trip.com, noting that the transaction will allow Trip.com to monetize its investment while maintaining its status as the largest minority shareholder in MakeMyTrip. Benchmark also reaffirmed its buy rating for Trip.com, citing market overreaction to recent travel data and maintaining confidence in the company’s growth trajectory. Morgan Stanley raised its price target for Trip.com to $78, reflecting adjustments in foreign exchange forecasts, while CFRA increased its price target to $65, citing expectations of slower revenue growth in upcoming years. Despite these varied assessments, analysts generally see potential for Trip.com’s continued growth and resilience.
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