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Investing.com - Morgan Stanley lowered its price target on Trip.com Group Limited (NASDAQ:TCOM) to $70 from $75 while maintaining an Overweight rating on the shares. The stock currently trades at $50.91, suggesting potential upside to the new target. Notably, InvestingPro’s Fair Value analysis indicates the stock may be undervalued at current levels, with its assessment closely aligning with Morgan Stanley’s bull case scenario.
The firm reduced its revenue forecasts by 0.6% to 1.7% for 2026 through 2028, reflecting slower hotel revenue growth. Morgan Stanley also lowered its non-GAAP operating profit estimates due to weaker operating leverage.
The firm cut its adjusted earnings per share projections by 1.3% for 2026, 2.5% for 2027, and 3.7% for 2028. According to InvestingPro Tips, three analysts have revised their earnings downwards for the upcoming period. Despite these revisions, the company trades at a low P/E ratio of 7.51. The 7% reduction in the price target mainly reflects the earnings revision and changes to outer year free cash flow forecasts.
Morgan Stanley set a bull case value of $70 and a bear case value of $43 for the stock. The analyst noted the adjustments stem from expectations of reduced growth in the company’s hotel business segment.
The Overweight rating indicates Morgan Stanley expects Trip.com shares to outperform the average total return of the stocks the firm covers over the next 12 to 18 months.
In other recent news, Trip.com Group Limited reported its fourth-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $4.97, compared to the forecasted $4.77. The company’s revenue also exceeded predictions, coming in at $15.4 billion against an expected $14.86 billion. Despite these positive results, several analyst firms have adjusted their price targets for Trip.com. Barclays lowered its price target to $75 from $90, citing an ongoing antitrust probe, though it maintained an Overweight rating. Benchmark also reduced its price target to $72 from $82, referencing margin concerns, while still maintaining a Buy rating. Morgan Stanley cut its price target to $75 from $87 due to higher operating costs, despite raising its revenue forecasts for 2026 and 2027 by 1%. Jefferies, on the other hand, reiterated a Buy rating with a price target of $88, highlighting future focus areas such as inbound travel and AI. These developments reflect a mix of optimism and caution among analysts regarding Trip.com’s future performance.
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