Truist takes down estimates for online travel stocks amid rising recession risk
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Strong travel demand at present is not likely to last long, according to a new analysis from Truist. As such, expectations for online travel names like Booking Holdings (NASDAQ:BKNG), Tripadvisor (NASDAQ:TRIP), Trivago (TRVG), and Expedia (NASDAQ:EXPE) must be tempered.

The research noted that a stronger dollar particularly hurts Booking Holdings (BKNG), Airbnb (NASDAQ:ABNB), and Expedia (EXPE) given their worldwide reach. More broadly, rising costs for travel alongside a weakening macroeconomic backdrop add pressure across the space.

âWhile [near-term] travel demand appears strong, we're revising our [online travel agency] estimates broadly lower heading into 2Q earnings to reflect a hit from a stronger USD as well as mounting risks to demand in 2023 amid an increasing likelihood of economic weakness/recession,â a team of analysts at the bank wrote.

As such, the team subsequently trimmed price targets Airbnb (ABNB) to $120 from $160, Booking Holdings (BKNG) to $2,600 from $3,000, Expedia (EXPE) to $185 from $240, and Trivago (TRVG). to $2.30 from $3.00.

To be sure, the recent selloff across the space provides opportunity in the specific stocks despite the target trimming. Booking Holdings (BKNG) and Expedia (EXPE) were pinpointed as âattractively valuedâ stocks at present given each is trending at low levels as compared to historical averages. Buy ratings were assigned to Booking (BKNG), Expedia (EXPE), and Tripadvisor, while Airbnb (ABNB) and Trivago (TRVG) were rated âHold.â
Read more on recent turbulence for travel stocks.