- Expedia shares moved higher after Wedbush upgraded the stock to Neutral and hiked its price target to $160 per share.
- Analyst James Hardiman cited pent-up travel demand and untapped demand for alternative accommodations for the upgrade.
- The stock rebounded from trendline support toward its 50-day moving average, but the intermediate-term trend remains uncertain.
Analyst James Hardiman cited a survey that showed pent-up demand for travel and untapped demand for alternative accommodations for the upgrade. With the company in the early stages of a major restructuring, the analyst believes that the stock could see margin improvements and stands on the low end when it comes to peer valuations.
Restructuring is an action taken by a company to significantly modify its financial and operational aspects, usually when the business is facing financial pressures.
The move follows Wells Fargo's upgrade of Expedia stock two weeks ago to Overweight with a $180 price target. Analyst Brian Fitzgerald suggested that Airbnb, Inc.'s (ABNB) strong market reception since its initial public offering (IPO) underscores an opportunity for Expedia to unlock value with its own short-term rental asset, VRBO, which could potentially see its own IPO down the road.
From a technical standpoint, Expedia stock rebounded from trendline support toward its 50-day moving average. The relative strength index (RSI) remains in neutral territory with a reading of 44, but the moving average convergence divergence (MACD) remains bearish. These indicators suggest that the stock has more room to run, but the long-term trend remains in question.
Traders should watch for a breakout from the 50-day moving average at $130.23 to retest reaction highs of $147.55 over the coming sessions. If the stock fails to break out, traders could see a move lower to trendline support at $110.00. If the stock breaks out from prior highs, traders could see a move toward trendline resistance at $150.00.
The Bottom Line
Expedia shares moved sharply higher after Wedbush upgraded the stock to Neutral with a $160 price target. Given pent-up travel demand and Airbnb's strong reception, several analysts believe that Expedia stock could see upside ahead. The stock rebounded from trendline support during Monday's session, but the long-term picture remains unclear.
The author holds no position in the stock(s) mentioned except through passively managed index funds.