Trip.Com Stock Makes It To Analyst's Top Pick Amid expanding China's Outbound Travel
Portfolio Pulse from Shivani Kumaresan
Mizuho analyst James Lee has reiterated a Buy rating on Trip.com Group Ltd (TCOM) with a price target of $55.00, citing the expansion of China's outbound travel as a key growth driver. Lee expects a strong rebound in revenue and profitability for FY24 as outbound flight capacity aligns with demand. He notes that outbound margins are double those of domestic travel and anticipates supportive policies to further boost outbound travel. The price target is based on a 20x multiple of 2025E EBITDA, slightly higher than Booking Holdings Inc (BKNG), reflecting the faster growth expected in China's travel market. However, Lee warns that if TCOM has to reduce its take rate to maintain market share, EBITDA growth could slow. TCOM shares were down 1.81% at $35.89 in the last check.
January 17, 2024 | 6:55 pm
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POSITIVE IMPACT
Mizuho analyst James Lee has given Trip.com a Buy rating with a $55 price target, highlighting the potential for strong revenue and profitability growth in FY24 driven by China's expanding outbound travel.
The positive outlook from the analyst, focusing on the expansion of China's outbound travel and the expected alignment of flight capacity with demand, suggests a bullish sentiment for TCOM in the short term. The price target of $55 indicates a significant upside potential from the current trading price. However, the current downward price action suggests market skepticism or broader market pressures that could temper short-term gains.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Booking Holdings Inc (BKNG) is mentioned as a comparative benchmark for Trip.com's price target, with TCOM expected to grow faster than BKNG's market, justifying a modest premium in valuation.
While BKNG is used as a comparative benchmark for TCOM's valuation, the direct impact on BKNG's stock is not clear from the article. The mention of BKNG is more for valuation context rather than a direct commentary on its performance or outlook. Therefore, the short-term impact on BKNG's stock is likely neutral.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50