On Monday, Bernstein analyst Boris Van adjusted the price target for Trip.com Group Limited (NASDAQ: TCOM), a China-based travel service provider, to $80 from the previous $85 while retaining an Outperform rating on the stock. According to InvestingPro data, Trip.com maintains a "GREAT" financial health score of 3.48, suggesting strong fundamentals despite the revision. The adjustment reflects recently released travel data indicating softer performance, prompting a downward revision of revenue and earnings per share (EPS) estimates for the company.
Despite the lower price target, Bernstein remains optimistic about Trip.com’s prospects, viewing the company as a resilient player within the China Internet sector with a strong long-term narrative. This optimism is supported by the company’s impressive 29.74% revenue growth and industry-leading 81.6% gross profit margin, as revealed by InvestingPro. The analyst anticipates improved demand growth later in the year, particularly as travel shifts more towards leisure activities.
Van’s commentary highlighted expectations that Trip.com is well-positioned to meet its forecasted growth rates, with approximately 10% growth in domestic travel and around 20% in international travel. These figures suggest that a full-year growth of about 15% is still achievable for the company, even after the recent adjustments. The strong analyst consensus of 1.29 (where 1 is a Strong Buy) indicates broad market confidence in Trip.com’s growth trajectory. For deeper insights into Trip.com’s valuation and growth metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.
Trip.com’s stock price is expected to be range-bound following the Chinese New Year (CNY) as the market looks for additional indicators of demand growth at both the sector and company levels. However, Bernstein views any potential stagnation in stock price as an attractive entry point for investors, considering the company’s solid long-term setup.
The company is navigating the current market conditions with an aim to align with the anticipated demand surge as travel preferences evolve. Bernstein’s maintained Outperform rating indicates confidence in Trip.com’s ability to thrive amidst the changing dynamics of the travel industry.
In other recent news, Trip.com Group Limited has been making significant strides in the market. Benchmark analysts recently maintained their Buy rating for Trip.com, emphasizing the company’s strong market position and potential for high earnings predictability. Similarly, Bernstein SocGen Group reiterated an Outperform rating for the company, suggesting that the market might be underestimating Trip.com’s potential to gain market share in the online travel agency sector.
Meanwhile, CLSA also maintained a positive stance on Trip.com, following the company’s third-quarter earnings for 2024, which surpassed expectations. The company saw a 15.6% year-over-year increase in total revenue, reaching 15.9 billion yuan, while adjusted EBIT rose by 23.7% to 5.5 billion yuan, exceeding estimates by 6%.
In other developments, US stocks with significant ties to China, including Trip.com, experienced a notable rally following announcements by China’s top leaders signaling a shift towards more accommodating monetary and fiscal policies. Despite recent downturns in premarket trading for US-listed Chinese stocks, these developments suggest a positive outlook for companies like Trip.com with strong ties to the Chinese market. These are some of the recent developments shaping the landscape for Trip.com.
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