MW Expedia's stock rallies as Wall Street cheers the return of its dividend

By Steve Gelsi

Expedia to resume payments of quarterly dividend for the first time since COVID-19

Expedia Group Inc.'s stock was climbing on Friday after the online travel company reinstated its quarterly dividend for the first time since the COVID-19 pandemic while keeping up its brisk pace of stock buybacks.

Expedia's (EXPE) fourth-quarter profit of $2.39 a share soundly beat the FactSet consensus estimate of $2.09 a share, while its revenue of $3.18 billion topped the analyst view of $3.07 billion.

"Our fourth quarter results exceeded our expectations and reflect continued strong execution and better-than-expected travel demand," Chief Executive Ariane Gorin said in a prepared statement.

The company said it would pay a 1% dividend or 40 cents a share, starting in March, and will continue to buy back stock "opportunistically."

Expedia has $3.2 billion remaining in its stock-purchase authorization. It bought back $1.6 billion in stock in 2024.

"With a really strong stock buyback with the allocation that we have, a strong dividend coming out of the gate at 1%, we feel pretty good about where we're going to go and what we're doing," Financial Chief Scott Schenkel said.

Expedia's stock rose 16% to $200.63 a share, the stock's highest level since 2022.

BofA Global Research analyst Justin Post reiterated a buy rating on Expedia and lifted his price target on the stock to $250 a share from $221 a share.

BofA continues to favor the stock over other online travel agencies, Post said.

Some of the pluses for Expedia include improvement in U.S. travel trends, as well as easy year-over-year comparisons due to slowness last year, and less exposure to foreign exchange losses than its competitors.

Expedia's stock has also been trading at a discounted multiple of seven times its earnings before interest, taxes, depreciation and amortization, while market sentiment around its management teams remains on the rise, Post said.

Meanwhile, HSBC upgraded Expedia to buy from hold and boosted the stock's price target to $215 a share from $195 a share, according to FactSet data.

-Steve Gelsi

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February 07, 2025 10:56 ET (15:56 GMT)

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