Barclays Upgrades Tripadvisor, Says Marriott Partnership Is 'First Of Many'

In a report published Monday, Barclays analyst Christopher D. Merwin upgraded the rating on Tripadvisor Inc TRIP from Underweight to Equal Weight, while raising the price target from $68 to $84. The analyst cited the partnership with Marriott International Inc MAR as the reason for the revisions. Marriott announced its plans to join the Instant Booking platform. Moreover, the consumer rollout of the product was progressing steadily in the U.S. "We believe the long-term potential for Instant Booking to disrupt the large OTAs, measured by further supplier partnerships and the pace of the rollout, will dictate the stock's performance much more so than estimate revisions," analyst Christopher Merwin said. Merwin expects incremental hotels sign on to Instant Booking in the near future, which is likely to be "a positive catalyst" for Tripadvisor's stock. He noted further that "revenue cannibalization" remained a risk, until there was "clarity on the monetization impact from Instant Booking." In the report Barclays noted, "We believe the Marriott partnership is likely the first of many large hotel partnerships, setting the stage for several more positive news events." The EPS estimate for 2015 has been reduced from $2.23 to $2.20 to reflect "potential monetization headwind from Instant Booking." The EPS estimate for 2016 has been raised from $2.71 to 2.73 to reflect higher revenue estimates due to better conversion offsetting lower commission rates.