Trip.com stock price target raised to $85 by Barclays on travel growth

Trip.com Group (TCOM) reported robust Q2 2025 results, with net revenue up 16% year-over-year to RMB 14.8 billion and non-GAAP diluted EPS of $1.01, surpassing expectations. Analysts like Barclays, which raised its price target to $85.00, highlighted significant growth in China's inbound travel, with bookings up over 100% year-over-year and substantial untapped potential given its low GDP contribution, alongside resilient outbound travel exceeding pre-pandemic levels. The company further demonstrated its commitment to shareholder returns by announcing a new $5 billion share buyback program. Despite strong fundamentals and analyst confidence, the stock experienced a slight after-hours decline, indicating some cautious investor sentiment.

Analysis

Trip.com Group (TCOM) reported a robust financial performance for its second quarter of 2025, with net revenue growing 16% year-over-year to RMB 14.8 billion and non-GAAP diluted earnings per ADS reaching US$1.01, exceeding expectations. The results are underpinned by powerful, multi-faceted growth trends, including a more than 100% year-over-year surge in inbound travel bookings—a segment management notes has significant runway, contributing less than 0.5% to China's GDP versus 1-5% in other nations. Furthermore, the outbound travel business has surpassed pre-Covid levels by over 20% despite flight capacity recovering to only 84% of its former level, indicating strong pent-up demand. Analyst sentiment is firmly positive, with Barclays raising its price target to $85 and Benchmark reiterating a Buy rating. This confidence is supported by strong fundamentals, such as an 81.06% gross profit margin and a new $5 billion share buyback program, which signals management's optimistic outlook. However, a slight decline in the stock's after-hours trading, despite the positive news, suggests a degree of investor caution that contrasts with the company's strong operational results and growth narrative.

Key Decisions for Investors

• Given the strong earnings beat, multi-pronged growth drivers, and a substantial new $5 billion share buyback, investors could view the market's cautious short-term reaction as a potential entry point for a long-term position.
• Investors should monitor the drivers behind the negative after-hours stock movement, as it may indicate underlying investor concerns about macroeconomic factors or China-specific risks not reflected in the company's operational report.
• Key catalysts to watch include the execution of the share repurchase program, which could provide support for the stock, and future data on flight capacity recovery, as further normalization represents a clear potential upside for the outperforming outbound travel segment.