2 Travel Stocks Slapped With Downgrades

Analysts see competition concerns in the travel industry

by Patrick Martin

Published on Jan 9, 2019 at 10:04 AM

Analysts weighed in on travel stocks this morning, and the results weren't pretty. Morgan Stanley downgraded both Expedia Group Inc (NASDAQ:EXPE) and Booking Holdings Inc (NASDAQ:BKNG) to "equal weight" from "overweight," while reducing their respective price targets to $125 and $2,050.

Jefferies, meanwhile, trimmed its price target on EXPE to $150, while downgrading BKNG to "hold" from "buy," and slashing its price target to $1,940 from $2,400. Both brokerage firms cited stiff competition in the travel sector and said slowing growth could lead to higher spending. 

In response, Expedia stock is down 2.7% to trade at $113.78. The security has been in a channel of lower highs and lows since late July. This has yielded five straight monthly losses, with breakout attempts thwarted by the stock's 80-day moving average. And with today's drop, EXPE is now staring at a 10% deficit year-over-year.

In the options pits, the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.56, which ranks in just the 7th percentile of its annual range. In other words, short-term options traders are more call-skewed than usual at the moment.

Looking at Booking Holdings, the stock is down 2.3% to trade at $1,648.50, and has now shed more than 20% in the past six months. An early November bull gap was swiftly rejected by the shares' 160-day moving average, sparking a downtrend that culminated in a two-year low of $1,606.27 on Dec. 24.

As for options traders, put buying has been more popular than usual across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 10-day put/call volume ratio of 1.14 at those exchanges is in the 74th annual percentile.

PETQ Stock Rallies After ICR Conference
Jefferies reiterated its belief in PETQ stock after the presentation
Bank Earnings Season Sparks Heavy Options Trading
Goldman Sachs earnings are in focus today
Netflix Options Traders Bet On Outsized Earnings Move
NFLX will report earnings after tomorrow's close

a schaeffer's exclusive

2019 TOP STOCK PICKS

Access your FREE insider report before it's too late!


Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


IRA/401K Investment Guide: 2019 Stock Market Crash
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
Star Wars Scare Sparks EA Options Activity; Earnings Beat Helps UAL Take Off
TBLT is the best stock on the Nasdaq today, tripling on a partnership
Morgan Stanley Backs Troubled Chinese E-Commerce Stock
Pinduoduo has had a drama-filled history on Wall Street
Research Exposes Shortcut to Stock Market Riches
A simple way to stop picking losers, and start cashing in like Wall Street's elite.