Morgan Stanley downgraded Expedia to Underweight, citing stagnant user growth and competitive pressure from Booking Holdings and Airbnb, while warning that the company's commodity-heavy product mix faces significant long-term risks.
Morgan Stanley downgraded EXPE to Underweight with a $235 price target, citing weak user retention and engagement growth versus peers.
Booking's monthly active users grew about 6% year-over-year, contrasting favorably with Expedia's flat growth.
Airbnb's monthly active users surged 10% year-over-year, highlighting competitive strength in alternative accommodations.
Expedia shares faced selling pressure after Morgan Stanley downgraded the stock to Underweight with a $235 price target. Analyst Brian Nowak cited stagnant monthly active user growth compared to the 6% and 10% gains reported by Booking Holdings and Airbnb, respectively. The firm warned that Expedia's reliance on commoditized travel products leaves it vulnerable to disintermediation as AI-powered tools gain market share.
The downgrade was driven by concerns over weak user retention and engagement growth, which are trailing behind key competitors like Booking Holdings and Airbnb.
Despite the Morgan Stanley downgrade, the broader Wall Street consensus remains a 'Moderate Buy' with a mean price target of approximately $335.