TCOM - Oppenheimer boosts its outlook on Trip.com with China domestic travel improving

Oppenheimer raises its price target on Trip.com (TCOM) to $38 as it notes that China domestic travel volumes are starting to exceed 2019 levels even as China outbound and Trip.com International travel (~40% of 2019 revenue) remain at very depressed levels. Analyst Jed Kelly: "We currently project 1Q21E revenue at ~60% of 1Q19 levels. However, we believe vaccine breakthroughs and APAC having less C19 issues relative to US/Europe, should equate to TCOM's international segment gradually recovering throughout 2021. Therefore, we forecast '21E/'22E revenue at 78%/93% of '19 levels. The key risk to '21E estimates is a more restrictive Chinese government. Currently, we're modeling operating margins approaching TCOM's 20% target in '22E, but believe a lower margin profile would be offset by higher revenue from more direct marketing investments." Oppenheimer keeps an Outperform rating on Trip.com. The firm's new PT is above the average sell-side PT of $33.60.

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Oppenheimer boosts its outlook on Trip.com with China domestic travel improving