Expedia Gears Up For Takeoff As Travel Bookings Bounce Back

Bank of America Securities reiterated a Buy rating on Expedia Group (EXPE) with a $211 price target, citing expectations for a mild recovery in U.S. travel bookings and stabilizing trends since April. Analyst Justin Post highlights key tailwinds including growth in B2B and advertising segments, new airline partnerships, and a robust free cash flow profile supporting potential 10% share buybacks. Despite continued year-over-year declines in U.S. travel spending, Post sees reduced risk of further estimate cuts and finds EXPE's valuation attractive at 5.8x 2026 EBITDA and 9x 2026 FCF, projecting 7% EBITDA growth in 2025.

Analysis

Expedia Group (EXPE) is receiving a bullish endorsement from Bank of America, which reiterated its Buy rating and a $211 price target, signaling optimism despite mixed travel data. The core of the thesis rests on the view that stabilizing booking trends since April have de-risked forward estimates, even as recent U.S. travel spending shows year-over-year declines, with airline and lodging spending down 10.9% and 3.5% in June, respectively. The analyst highlights several key tailwinds, including growth in the B2B and advertising segments, which are being bolstered by new strategic partnerships with Southwest Airlines and Ryanair. A conservative 2025 forecast anticipates 7% EBITDA growth, while a strong free cash flow profile is expected to support a significant share repurchase program, potentially retiring 10% of shares outstanding over the next year. The stock's current valuation is presented as a key part of the appeal, trading at 5.8x estimated 2026 EBITDA and 9x free cash flow, which is considered attractive, especially given its recent underperformance relative to peers.

Key Decisions for Investors

• Investors could view Expedia's current valuation and year-to-date underperformance as an attractive entry point, aligning with the analyst's thesis that forward-looking catalysts outweigh current macro headwinds.
• Monitor upcoming U.S. travel data closely, as a mild recovery in summer and shoulder season bookings is the primary catalyst expected to drive the stock higher.
• Focus on the company's execution in its B2B segment and the financial impact of new airline partnerships, as these are key growth drivers that could offset softness in the domestic consumer market.
• Consider the aggressive 10% share buyback potential as a significant source of shareholder return and a signal of management's confidence, which could provide downside support for the stock.