Trip.com Analysts Optimistic Amid Robust Travel Trends In China As Stock Looks To Extend Strong Gains For Year
By Stocktwits Inc | First Published Nov 18, 2024, 10:55 PM ISTMizuho’s optimism regarding Trip.com is premised on strong outbound travel trends in China despite the domestic economy’s structural challenges and the looming tariff threat.
Trip.com Holdings Limited ($TCOM), a one-stop travel platform, is scheduled to report its third-quarter results after the market closes on Monday.
Shanghai, China-based Trip.com’s quarterly earnings per share (EPS) is widely expected to decline from $1.10 in 2023 to $0.96 in 2024. The consensus, however, models an increase in revenue from $1.93 billion to $2.18 billion.
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In the preceding quarter, Trip.com’s revenue climbed 14% year-over-year (YoY), with the company attributing the growth to strong travel demand, especially cross-border travel. Adjusted earnings before interest, taxes and depreciation climbed about 19%.
On the second-quarter earnings call, co-founder and executive chair of the board Jianzhang Liang said, "We are committed to harnessing the power of AI and unlocking its full potential, ensuring we deliver exceptional value and continuous innovation to meet the evolving needs of our customers."
In June, the company launched its AI-powered 2024 Trip.Best Global and Asia 100 lists which are based on real user reviews and year-round sales popularity.
CEO Jie Sun highlighted the resilience of the Chinese travel market and said the travel market will see robust growth following a strong start in 2024.
Data from Statista showed that Trip.com was the fourth-most visited website worldwide in October, with 100.83 million visitors compared to Booking Holdings, Inc.’s ($BKNG) 528.03 million
The anticipated economic recovery in China on the back of copious stimuli from the government and the central bank should bode well for the company.
Last week, BofA raised the price target for Trip.com stock from $56 to $67, assuming a 20-30% rise in non-GAAP profit for the 2024-25 period due to efficiency measures implemented by the company and its strong operating leverage.
Ahead of it, Mizuho Securities bumped up the price target from $65 to $78, citing China’s stimulus policies. Despite a mixed outlook due to tariff threats and the structural challenges faced by the Chinese economy, the firm remained positive about outbound travel demand in China.
Trip.com shares have rallied over 65% for the year-to-date period. They ended Friday’s session down 0.73% at $59.49.
Commenting on the Stocktwits platform, an options trader said Trip.com shares have notable relative strength among Chinese ADRs.
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