Shares of online travel agency Expedia (NASDAQ:EXPE) jumped 5.4% in the afternoon session after Evercore analyst Mark Mahaney upgraded the stock's rating from In line (Hold) to Outperform (Buy) and raised the price target from $135 to $200, citing confidence in the company's growth potential based on industry checks and proprietary analysis. . The price target indicates a potential 46% upside from where shares were traded when the upgrade was announced.
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What is the market telling us:
Expedia's shares are not very volatile than the market average and over the last year have had only 8 moves greater than 5%.
The previous big move we wrote about was 15 days ago, when the stock gained 8.5% on the news that the company reported third quarter results that narrowly topped analysts' revenue expectations, driven by strong performance in its B2B division. We were also glad it expanded its user base and beat Wall Street's EPS and adjusted EBITDA estimates. Management's commentary around the business this quarter was positive: its new One Key initiative, which unifies the company's different brands into one loyalty program, is showing traction. This program could result in a stickier customer and more predictable revenue, two things that the market generally cheers. The company also completed the final phase of its Vrbo unit's integration. Zooming out, we think this was a very solid quarter, showing that the company is staying on track.
Expedia is up 55.8% since the beginning of the year. Investors who bought $1,000 worth of Expedia's shares 5 years ago would now be looking at an investment worth $1,208.
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