Wells Fargo names Amazon, Google and Expedia as best tactical longs

Investing.com - Wells Fargo (NYSE:WFC) has identified Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL) and Expedia (NASDAQ:EXPE) as its "best tactical longs" ahead of upcoming earnings reports. Expedia, currently valued at $23.51B, has demonstrated impressive momentum with a 36.71% return over the past year.

The firm notes that investors are currently positioned "much more aggressively in the SMidCaps and higher beta names," which contrasts sharply with the defensive approach observed last quarter. According to InvestingPro data, Expedia’s beta of 1.58 aligns with this higher-beta trend.

For Amazon, Wells Fargo expects that the "alleviation of supply constraints late in 2Q" will enable the company to address market skepticism about AWS growth in the second half of the year, particularly after weaker third-party data for April and May.

The firm anticipates Google will benefit from foreign exchange-aided search revenue acceleration and paid clicks growth, followed by a "likely benign Search Case remedy outcome" that could help the stock recapture relative performance.

Regarding Expedia, Wells Fargo points to accelerating web traffic, improving U.S. travel macroeconomic conditions supported by positive airline commentary, and potential positive revisions as key factors supporting its recommendation.

In other recent news, Expedia Group reported a 1.5% decline in its B2C revenues for the first quarter, alongside a 200 basis point reduction in its full-year bookings guidance. Despite these challenges, Benchmark reiterated a Buy rating on Expedia, setting a price target of $215.00. The firm’s optimism is partly driven by Delta Air Lines (NYSE:DAL)’ positive outlook on travel demand stabilization, which could benefit Expedia. Meanwhile, Cantor Fitzgerald maintained a Neutral rating on Expedia with a $170.00 price target, highlighting the company’s strategic advancements in AI integration and B2B offerings. These developments, presented at Expedia’s annual product event, are seen as promising for the company’s long-term growth. Additionally, former Expedia CEO Peter Kern is set to acquire the Italian luxury lingerie company La Perla, with plans to invest approximately €30 million by 2027 to revitalize its production site. This acquisition aligns with Kern’s strategy to maintain current employment levels and create new positions. In the broader OTA sector, first-quarter earnings surpassed expectations, although Expedia’s B2C segment continues to underperform compared to its peers.

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