Peter McNally, Head of Global Analyst at Third Bridge, joins Morning with Maria to break down airline earnings and reveal the top Big Tech stocks.
Expedia Group shares rose on Friday after the online travel company said it expects revenue growth to moderate in 2024 as airfares soften from post-pandemic highs. The closing price fell 18%, the largest single-day decline in about four years.
The company announced late Thursday that Chief Executive Officer Peter Kahn would step down and be replaced by company insider Ariane Gorin.
Peter Kahn, Vice Chairman and Chief Executive Officer of Expedia Group, speaks at the Bloomberg Technology Summit in San Francisco, California, USA on Wednesday, June 8, 2022. Expedia announced Thursday that Khan would be stepping down. (Photographer: David Paul Morris/Bloomberg via Getty Images/Getty Images)
The warning ended Expedia’s four-day winning streak and pushed shares of other travel companies lower. Booking Holdings, TripAdvisor and Airbnb fell 1% to 4%.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| Expe | Expedia Group Co., Ltd. | 131.11 | -28.36 | -17.78% |
| BKNG | Booking Holdings Co., Ltd. | 3,758.18 | -82.04 | -2.14% |
| trip | TripAdvisor Co., Ltd. | 21.71 | -0.84 | -3.73% |
| ABNB | AIRBNB Co., Ltd. | 147.59 | -2.94 | -1.96% |
“At a macro level, we expect travel demand to remain relatively healthy, but we do expect global growth to slow,” outgoing CEO Khan said at Expedia’s earnings conference. ” he said.
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Air travel revenue was also affected by the grounding of Boeing’s 737 Max 9 aircraft, with multiple cancellations impacting the company’s Vrbo brand.
“Overall, we see the ‘acceleration story’ slowing due to the ongoing CEO transition, with near-term structure creation looking difficult,” Wells Fargo analysts said in a note.
“At a macro level, we expect travel demand to remain relatively healthy, but we do expect global growth to slow,” outgoing CEO Khan said at Expedia’s earnings conference. ” he said.
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Air travel revenue was also affected by the grounding of Boeing’s 737 Max 9 aircraft, with multiple cancellations impacting the company’s Vrbo brand.
“Overall, we see the ‘acceleration story’ slowing due to the ongoing CEO transition, with near-term structure creation looking difficult,” Wells Fargo analysts said in a note.
The company said it expects gross booking growth to be in the low to mid-single digit range for the current quarter, and revenue growth in the mid-single digits.
Expedia shares posted their biggest single-day decline in four years on Friday. (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
“Expedia’s first-quarter guidance may have disappointed investors, with sales growth in the mid-single digits compared to the consensus estimate of 9%,” said CFRA analyst Cie Desta. It is expected to remain within that range.”
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However, the company reported adjusted earnings of $1.72 per share, beating expectations on strong demand during the holiday season. Analysts’ average estimate was for earnings of $1.68 per share, according to LSEG data.
Expedia’s stock trades at about 12.35 times forward earnings, well below rival Booking’s 21.04 times.
