Trip.com stock steady as Jefferies reiterates buy rating on MakeMyTrip deal

Jefferies maintained its buy rating and $80.00 price target on Trip.com Group Limited (NASDAQ:TCOM), currently trading at $60.45, following the company’s announcement of a share repurchase agreement with MakeMyTrip. According to InvestingPro data, Trip.com maintains strong financial health with an impressive 81.06% gross profit margin and holds more cash than debt on its balance sheet. The firm expects Trip.com to monetize its investment while maintaining its position as MakeMyTrip’s largest minority shareholder after the transaction.

Under the agreement, Trip.com will sell a portion of its Class B ordinary shares back to MakeMyTrip for cancellation. MakeMyTrip has proposed to offer $1.25 billion in convertible senior notes due 2030 and will grant initial purchasers an option for an additional $187.5 million in notes. With Trip.com’s market capitalization of $39.51 billion and strong financial metrics, InvestingPro analysis suggests the company is currently undervalued, with additional insights available in the comprehensive Pro Research Report.

MakeMyTrip also announced primary offerings of 14 million ordinary shares, with underwriters having a 13-day option to purchase up to 2.1 million additional shares. Jefferies believes MakeMyTrip is issuing convertible bonds and raising proceeds from external parties to fund the share buyback from Trip.com.

The transaction allows Trip.com to monetize its investment value while optimizing its portfolio and enhancing shareholder returns. Jefferies estimates Trip.com’s holdings in MakeMyTrip will decrease to approximately 20% following the completion of the deal.

Jefferies expects Trip.com to use the proceeds from the transaction to support its overseas operations, meet debt obligations, and fund its share buyback program. The company has demonstrated solid performance with 16.95% revenue growth in the last twelve months, reinforcing its position as a prominent player in the Hotels, Restaurants & Leisure industry. Get deeper insights into Trip.com’s financial health and growth prospects with InvestingPro, which offers 8 additional key tips about the company’s performance and outlook.

In other recent news, Trip.com Group Limited has reported a robust first quarter for 2025, with a 16% year-over-year revenue increase, surpassing expectations. The company attributes this performance to strong travel demand, particularly in leisure travel trends, and has confirmed its financial outlook for continued growth throughout the year. Analysts from Benchmark have maintained a Buy rating on Trip.com, with a price target of $80, citing the company’s solid execution and potential for international growth.

Morgan Stanley (NYSE:MS) also raised its price target for Trip.com to $78, influenced by adjustments in foreign exchange forecasts, while maintaining an Overweight rating. CFRA increased its price target to $65, holding a Hold rating, and noted a projected moderation in revenue growth in the coming years. Bernstein SocGen Group reiterated an Outperform rating with a $75 target, highlighting Trip.com’s strategic decisions amid competitive pressures.

Trip.com reported first-quarter revenue of 13.8 billion yuan, a 16.2% increase year-over-year, aligning with market estimates, though gross margins fell short due to a higher proportion of revenue from its services. The company is focusing on international expansion and has adopted a strategic approach to discounting in response to competitive pressures. Despite macroeconomic uncertainties, analysts remain optimistic about Trip.com’s digital transformation and geographic diversification efforts.

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