Avis Budget Group (CAR)
Challenges have beset the management of Avis Budget Group (NASDAQ:CAR) in recent times, notably grappling with high interest rates and the softness in the used vehicle market. The company’s fourth-quarter results painted a stagnating picture, with revenue plateauing at $2.8 billion compared to the previous year. A decline of 30% in adjusted earnings per share mirrored the struggle against mounting interest expenses and fleet costs.
Despite these hurdles, industry analysts hold an optimistic view, foreseeing Avis Budget Group benefiting from the resurgence in travel spending as interest rates retreat. Bank of America (NYSE:BAC) has pegged a bullish $170 target price, anticipating a robust earnings rebound driven by solid pricing and operational efficiency.
While Avis stock has tumbled 30% year-to-date, the dimmed price presents a lucrative opportunity for investors at 7.1 times forward earnings and 0.4 times trailing sales. Analysts predict a 40% upside potential, with an average price target of $177.50.
Booking Holdings (BKNG)
Booking Holdings (NASDAQ:BKNG) stands as a premier online travel services provider, brimming with a slew of renowned travel brands like Booking.com, Priceline, Agoda, Kayak, and OpenTable. The fourth quarter showcased a robust performance, with a 16% surge in gross travel bookings fueling an 18% revenue increase to $4.8 billion. Non-GAAP EPS soared by 29% to $32.00, highlighting operational efficiency amid the travel industry’s recovery.
As Booking Holdings delves into vertical integration and expands its AI Trip Planner to personalize travel recommendations, analysts predict sustained double-digit earnings growth over the coming years. The stock has yielded a 3% return this year, trading at 20.7 times forward earnings and 6.2 times trailing sales. Furthermore, a 12-month price target of $3,950 suggests a 10% potential upside.
Expedia Group (EXPE)
Expedia (NASDAQ:EXPE), a travel juggernaut housing Expedia.com, Hotels.com, Vrbo, and Egencia, navigated through the complexities of 2023 by honing its financials. Despite a leadership shakeup causing an initial turmoil in stock prices, Q4 results showcased resilience, evident in a 10% revenue growth to $2.9 billion and a 37% surge in adjusted EPS to $1.72, catalyzed by business-to-business segment traction.
Underpinning its strategy on a merchant model and tech-enhanced partnerships for travel package deals, Expedia’s profound brand footprint and commitment to efficiency enhancement position it favorably to harness the surging travel demand. The stock, having slipped close to 12% year-to-date, trades at an attractive valuation with a P/E ratio of 14.7 and a P/S ratio of 1.5. Analysts foresee a potential upside of 14% from the current level, with a 12-month price target of $157.50.
On the publication date, Tezcan Gecgil maintained no direct or indirect positions in the mentioned securities. The views expressed are in accordance with the InvestorPlace.com Publishing Guidelines.
