TripAdvisor stock slips after double downgrade at Barclays

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Shares of TripAdvisor Inc. TRIP, -0.52% are down 1.3% in Monday afternoon trading after Barclays analyst Mario Lu downgraded the stock by two notches, to underweight from overweight. “[W]ith recovery in global travel effectively halted in 3Q21 as the Covid Delta variant emerged, we believe investors are shifting focus to longer term themes such as the continued shift to alternative accommodations and changing user behavior due to a more flexible work schedule, neither of which directly benefits TripAdvisor,” Lu wrote. He also noted a change in consumer bookings behaviors, as he expects that social-media, online-travel agencies, and organic search will keep winning share versus metasearch-driven bookings. Finally, TripAdvisor recently announced changes to its Trip Plus program that could mean more “limited upside” from the initiative. TripAdvisor previously was looking to offer immediate discounts through the program but now it’s switching to cash-back offers. “Because of this business model change and uncertainty in terms of how and what form travelers will receive the cashback, we have significantly reduced our top line expectations from Plus from $200mn+ to closer to $50mn by 2023 as we believe the lag in payment back to the travelers in this new offering will not be as enticing to travelers as it removes the no-brainer decision,” Lu wrote. Shares have declined 14% over the past three months as the S&P 500 SPX, +0.18% has risen about 5%.

This article was originally published by Marketwatch.com. Read the original article here.

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