Tripadvisor ‘s strategic plan, coupled with its recent outperformance, put Bernstein on the sidelines. Analyst Richard Clarke downgraded the stock to market perform from outperform. Clarke also lowered his price goal by $2 to $26. That price goal implies the stock could rise 3.2% over the subsequent yr from where it closed Wednesday. The travel platform on Tuesday posted better-than-expected earnings and revenue for the fourth quarter. Looking ahead, nevertheless, the corporate said to expect flat adjusted EBITDA in 2023 despite a virtually 20% increase within the previous yr. The stock was down 2.9% in premarket trading Thursday. Management laid out what Clarke called a “highly sensible” strategic plan for its core business during fourth-quarter earnings. It includes stepping back from areas like media and entertainment to give attention to better-performing units. But Clarke said the plan’s guided final result still puts its core revenue under 2019 levels, while investments would offset any cost saving measures. That led Clarke to revise his EBITDA forecasts down 11% in 2023 and 20% in 2024. “That is going to be a gentle multi-year roll-out and the final result seems more defensive than offensive with the aim of ‘long run regular profitable growth’, which is basically inline with the consensus view and below our previous expectations,” he said in a note to clients Thursday. He also said the move to investments has taken advantages away from the corporate’s “buoyant” begin to the yr. The stock has gained 40.2% because the start of 2023, regaining ground after losing 34% in 2022. That recent outperformance makes the stock less attractive, Clarke said. But the corporate still has long-term monetization opportunities, with Clarke noting the corporate has a low market cap-to-user ratio and the potential for increased monetization. Clarke also said Viator and Fork remain top brands inside Tripadvisor, with the previous still being considered one of the best of experiences brands and the latter outperforming within the European restaurant market. — CNBC’s Michael Bloom contributed to this report.
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