Expedia shares fall as lower-than-expected quarterly revenue forecasts heighten market concerns

Reuters, November 5 - In premarket trading on Thursday, shares of Expedia Group (EXPE.O) fell nearly 7% after the travel booking company issued fourth-quarter revenue guidance (link) that came in below market expectations, sparking investor concerns over its growth outlook.

As of Wednesday's close, Expedia's stock had risen about 12% this year, outperforming rival Booking Holdings (BKNG.O) and the Dow Jones U.S. Travel & Leisure index (.DJUSCG) — which have fallen 20% and remained roughly flat, respectively.

• According to data compiled by LSEG, Expedia expects its fourth-quarter revenue to be between $3.69 billion and $3.75 billion, with the midpoint below analysts' average estimate of $3.74 billion.

• Expedia's chief financial officer said that the results of the U.S. midterm elections, as well as turmoil in Europe and the Middle East, contributed to this pessimistic outlook.

• Analysts at Baird said the softer guidance was a surprise. JPMorgan noted that although the slowdown is “temporary,” it could raise some concerns.

• BTIG expects that, because Expedia has a higher share of business in the U.S. domestic market, the company will reverse the trend of disappointing outlooks widely offered by competitors and the hotel industry.

• According to data compiled by LSEG, Expedia's average rating remains “buy,” but the median target price has been cut from $335 last month to $332.50.

• Most online travel booking sites and hotel chains are relying on strong domestic demand to offset weakness in the Middle East market.

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