The Pfizer (PFE) vaccine news seems to have set TripAdvisor shares on a strong uptrend, with the stock price moving from the high 10s to the high 30s in less than four months, as investors continue to bet on the comeback of travel stocks once the virus crisis is in the rearview mirror.
Meanwhile, the market will have the opportunity to get a glimpse of the shape of the recovery for the industry when TripAdvisor announces its financial results for the fourth quarter of 2020, with the company’s top-line performance and guidance possibly tipping market participants about the short-term outlook of travel stocks.
What are analysts expecting for TripAdvisor’s Q4 earnings?
For the fourth quarter of last year, analysts surveyed by Zacks.com are expecting to see revenues landing near the $100 million threshold, representing a 70% decline compared to the same quarter a year ago.
Meanwhile, this would also represent a drop of about a third of the company’s sales compared to the third quarter of 2020 as the virus situation worsened in multiple corners of the developed world including the United States and the United Kingdom – the two biggest regions by revenue for the firm.
Moreover, Zacks’s consensus estimate for TripAdvisor’s losses per share during the fourth quarter currently stands at $0.26, meaning that the company swung to negative profitability during the three-month period amid this virus-related downturn.
At this point, it seems that the market has already looked past these gloomy results, as the share price is heading upwards despite revenues heading downwards.
This forward-looking nature of the markets is not uncommon, yet, if the company fails to live up to these expectations, the share price could plunge dramatically as the impact of a prolonged virus crisis was even worst than the market had estimated.
On the other hand, if results come out better than expected chances are that the stock price could go up sharply as market participants might anticipate a faster-than-expected recovery for the company and the industry for that matter.
TripAdvisor share price forecast
The chart above shows how the latest price action seen by TripAdvisor shares has been forming a perfectly symmetrical price channel, with the stock price currently heading up on the back of the industry’s positive momentum.
The virus situation keeps being the most important driver for the share price, with the progressive rollout of vaccines in both the United States and the United Kingdom positively affecting the outlook for TripAdvisor’s business as travel bans and other restrictions will probably be lifted over the coming months.
For now, if the price trend were to continue as is, a plausible TripAdvisor share price forecast would see the stock surging to $47.50 over the coming weeks, offering a potential 25% upside for investors based on yesterday’s closing price if that target was to be hit.
Analysts’ targets for TripAdvisor
According to MarketBeat, the current consensus TripAdvisor share price forecast stands at $24.81 per share, with a total of 5 analysts out of 17 currently rating the stock a buy.
Meanwhile, out of those 17, only 1 analyst holds a sell rating even though the consensus 12-month price target for the shares is 35% below the current market price.
Notably, the last revision for TripAdvisor came from Deutsche Bank, with the German institution boosting the price target for the shares to $38 even though they are currently rating the stock a hold.
Apart from Deutsche, Barclays started covering TripAdvisor in early January this year, giving the stock an overweight rating while setting a price target of $25 per share for the coming 12 months.
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