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'Very likely' Trip.com Group will rise relative to country index over the next 60 days - Morgan Stanley

AuthorSam Boughedda
Published 08/03/2023, 15:42
Updated 08/03/2023, 15:42
© Reuters.

By Sam Boughedda

Morgan Stanley analysts named Trip.com Group (NASDAQ:TCOM) a "research tactical Idea" in a note on Wednesday, maintaining an Overweight rating and a $50 per share price target on the stock.

They said the firm believes TCOM's share price will rise relative to the country index over the next 60 days.

"This is because of raised forecasts/guidance," the analysts stated. "TCOM's 4Q22 results on March 7 suggest strong momentum YTD and we expect Rmb8bn revenue and Rmb1.5bn non-GAAP OP in 1Q23, significantly above consensus (Rmb0.3bn), driven by strong domestic pent-up demand and outbound travel share gain (recovered to >40% of 2019's level vs. industry international flight capacity recovery of 15-20% of 2019's level)."

They revealed that the catalysts include the upcoming holiday season and international flight capacity recovery.

"TCOM is trading at 19x 2024 P/E and our PT implies 25x," said the analysts, who added that the firm estimates that there is "about a 70% to 80% (or "very likely") probability for the scenario."

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