Piper Sandler has downgraded Expedia Group (NASDAQ: EXPE) from ‘Neutral’ to ‘Underweight’, reducing the price target from \$174 to \$135. This decision follows Expedia’s Q1 2025 earnings report, which revealed a 3% revenue growth and a 4% increase in bookings—both at the lower end of expectations. The company also revised its full-year guidance downward, now anticipating bookings and revenue growth between 2% and 4%, compared to the previous 4% to 6% range. The downgrade reflects concerns over Expedia’s significant exposure to the U.S. market, which accounts for approximately two-thirds of its business, amid weakening domestic and inbound travel demand.
📌 Despite these challenges, Expedia’s business-to-business segment showed resilience, with a 14% growth in bookings, supported by international markets. However, the overall outlook remains cautious, as the company faces headwinds from a softening U.S. travel market and broader economic uncertainties.
📌 In terms of shareholder returns, Expedia reinstated its quarterly dividend in March 2025, paying \$0.40 per share, marking its first dividend since suspending payouts during the COVID-19 pandemic. This equates to an annual dividend of \$1.60, yielding approximately 0.95% based on recent share prices. The dividend payout ratio stands at 0%, indicating that the company is retaining earnings to navigate the current challenging environment.
📌 In summary, the downgrade reflects concerns over Expedia’s exposure to a weakening U.S. travel market and lowered growth expectations, despite some positive performance in its international B2B segment.