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Expedia’s Stock Plummets as Analysts Warn of Uncertain Future

  • Expedia’s stock falls to its lowest point in nearly three months
  • Investors concerned about the immediate future of the online travel company
  • CEO Peter Kern announces departure, to be replaced by Ariane Gorin
  • Analysts express mixed opinions on the CEO change and its impact on Expedia
  • Expedia faces several challenges, including a longer-than-expected recovery for VRBO and increased marketing spending

Introduction

Expedia Group Inc.’s stock is heading for its lowest close since November 2021 as Wall Street expresses doubts about the online travel company’s immediate future. The stock took a hit after Expedia announced a surprise CEO change, with Peter Kern stepping down and being replaced by Ariane Gorin. Analysts are divided on the implications of this change and what it means for Expedia’s performance in the coming months.

Analysts’ Opinions

BofA Securities Analyst Justin Post

Justin Post, an analyst at BofA Securities, downgraded his rating on Expedia’s stock to hold. He believes that the company has “a lot to work through” in the first half of the year and that the CEO change adds to the uncertainty. Post highlights several challenges that Expedia is facing, including a longer-than-expected recovery for its vacation-rental company VRBO and a growth strategy that requires increased marketing spending in competitive international markets.

B. Riley Securities Analyst Naved Khan

Naved Khan, an analyst at B. Riley Securities, is more positive about the CEO change. He believes that the transition will be smooth given Ariane Gorin’s background and experience. Khan is optimistic about Expedia’s above-market growth rate, margin expansion, reduced costs, strength in the business-to-business segment, and the impact of the company’s aggressive share buyback program.

Oppenheimer Analyst Jed Kelly

Jed Kelly, an analyst at Oppenheimer, also sees opportunities in Expedia’s current situation. He suggests taking advantage of any share price weakness and highlights the company’s guidance, which implies bigger margins on higher operating efficiencies and revenue growth of about 10%.

UBS Analyst Stephen Ju

Stephen Ju, an analyst at UBS, acknowledges that the CEO change adds an extra layer of complication. He believes that Expedia is a self-help execution story and that the success or failure of its initiatives depends on management. Ju advises waiting for incremental signs that the company can deliver on its guidance parameters.

Conclusion

The announcement of Expedia Group Inc.’s CEO change has had a significant impact on the company’s stock, which is now at its lowest point in nearly three months. Analysts have differing opinions on the implications of this change, with some expressing concerns about the company’s future and others remaining positive about its growth prospects. As Expedia faces various challenges, including a longer-than-expected recovery for VRBO and increased marketing spending, investors will be closely watching how the new CEO, Ariane Gorin, navigates these obstacles and leads the company forward.

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