Deutsche downgrades Expedia to Hold on ‘tepid’ B2C growth

Deutsche Bank downgraded Expedia (EXPE) to Hold from Buy with a price target of $192, up from $150. The company’s Q3 results were “generally mixed” with bookings and adjusted EBITDA marginally ahead, while revenue came in slightly below, the analyst tells investors in a research note. The firm says that while progress is being made across Expedia’s brands, business-to-consumer volumes are still only growing 3%. For Expedia’s multiple to continue to move higher into 2025, bookings and revenue growth will have to accelerate while the company delivers margin leverage, contends Deutsche Bank. While the firm models modest improvement on these fronts, it says ongoing “tepid growth” in the company’s B2C business, despite growing investments, clouds the 2025 earnings growth algorithm for the company. With Expedia trading near the high end of its two-year trading range, it believes the stock’s risk/reward is balanced.