Analysts’ Opinions Are Mixed on These Services Stocks: Expedia (NASDAQ: EXPE) and Francesca’s (NASDAQ: FRAN)

By Carrie Williams

Analysts have been eager to weigh in on the Services sector with new ratings on Expedia (NASDAQ: EXPE) and Francesca’s (NASDAQ: FRAN).

Expedia (NASDAQ: EXPE)

Cantor Fitzgerald analyst Naved Khan reiterated a Buy rating on Expedia (NASDAQ: EXPE) today and set a price target of $178. The company’s shares closed yesterday at $144.15, close to its 52-week high of $146.03.

Khan commented:

“HomeAway positioned for strong growth. We expect bookings growth to remain strong as this business makes progress in its transition to an online transaction-based model, driven by online bookings vs. subscription. In its pursuit of this, we believe that HomeAway is spending increasing ad dollars on variable ad channels. Search query interest through May rose 1,700bps Q/ Q in the US and ~100bps WW. Total unique visitors to HomeAway’s US site increased 11% in April vs. 9% in 1Q17 (comScore). Trivago’s momentum likely to continue. The growth drivers here include strength in both volume and pricing, with the former driven by Trivago’s focus on heavy branded advertising coupled with spending on variable ad channels. Changes to landing page requirements in 4Q16 are likely to continue to drive strong unit pricing short term and yield improved consumer experience LT, in our view.”

According to TipRanks.com, Khan is a 5-star analyst with an average return of 21.8% and a 85.2% success rate. Khan covers the Technology sector, focusing on stocks such as Endurance International, TripAdvisor Inc, and Travelzoo Inc.

Currently, the analyst consensus on Expedia is Moderate Buy and the average price target is $153.15, representing a 6.2% upside.

In a report issued on May 17, RBC Capital also reiterated a Buy rating on the stock with a $160 price target.
Francesca’s (NASDAQ: FRAN)

In a report released today, Susan Anderson from FBR Capital upgraded Francesca’s (NASDAQ: FRAN) to Hold, with a price target of $14. The company’s shares closed yesterday at $12.47.

According to TipRanks.com, Anderson is a 1-star analyst with an average return of -1.1% and a 44.8% success rate. Anderson covers the Services sector, focusing on stocks such as Ascena Retail Group, Abercrombie Fitch, and ClubCorp Holdings.

Francesca’s has an analyst consensus of Hold, with a price target consensus of $15.50.

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