TripAdvisor, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Richard Clarke from Bernstein maintained a Buy rating on the stock and has a $20.00 price target.
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Richard Clarke has given his Buy rating due to a combination of factors that highlight TripAdvisor’s strategic shifts and financial outlook. The company is integrating Viator into its core operations rather than spinning it off, which is expected to streamline the business and create significant synergies, including cost savings of $85 million. This integration is projected to enhance TripAdvisor’s EBITDA by approximately 20% by FY27, shifting the focus to the growing ‘Experiences’ segment rather than the declining revenues of the core brand.
Furthermore, despite some disappointing revenue figures, TripAdvisor’s strong cost performance led to an EBITDA beat, driven by the success of Viator and The Fork. The company’s guidance indicates a challenging environment, with expected declines in some areas, but the strategic focus on Experiences and cost management positions TripAdvisor for potential future outperformance. By FY27, the company aims for an EBITDA of around $450 million, with a significant portion of its enterprise value represented by cash and The Fork, suggesting a strong financial foundation moving forward.
According to TipRanks, Clarke is a 3-star analyst with an average return of 3.4% and a 51.92% success rate. Clarke covers the Consumer Cyclical sector, focusing on stocks such as Hyatt Hotels, TripAdvisor, and Airbnb.