Investors interested in Consumer Discretionary stocks should always be looking to find the best-performing companies in the group. Trip.com (TCOM) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Discretionary sector should help us answer this question.Trip.com is one of 281 individual stocks in the Consumer Discretionary ...

Company Overview - Trip.com closed at $45.36, showing a slight increase of +0.07% from the previous session, outperforming the S&P 500's decline of 0.71% [1] - Over the past month, Trip.com shares have decreased by 9.3%, underperforming the Consumer Discretionary sector's loss of 0.43% and the S&P 500's gain of 1.08% [1] Financial Performance - The upcoming earnings per share (EPS) for Trip.com is projected at $0.79, representing a 12.86% increase year-over-year [1] - Revenue is expected to reach $1.79 billion, reflecting a 15.27% increase from the same quarter last year [1] - For the entire fiscal year, the Zacks Consensus Estimates predict an EPS of $3.08 and revenue of $7.3 billion, indicating increases of +12.41% and +17.23% respectively from the previous year [2] Analyst Estimates and Market Sentiment - Recent adjustments to analyst estimates for Trip.com suggest a favorable outlook on the company's business health and profitability [2] - The Zacks Rank system currently rates Trip.com as 1 (Strong Buy), indicating a positive sentiment among analysts [3] - The Forward P/E ratio for Trip.com is 14.72, which is lower than the industry average of 17.09, suggesting a valuation discount [3] Industry Context - Trip.com operates within the Leisure and Recreation Services industry, which is part of the Consumer Discretionary sector [3] - The current Zacks Industry Rank for this sector is 153, placing it in the bottom 40% of over 250 industries [3]

Company Performance - Trip.com closed at $49.29, with a daily increase of +0.61%, outperforming the S&P 500 which fell by 0.88% [1] - The stock has decreased by 3.53% over the past month, underperforming the Consumer Discretionary sector's loss of 2.04% and the S&P 500's gain of 5.11% [1] - Upcoming earnings per share (EPS) is projected at $0.79, a 12.86% increase year-over-year, with revenue expected to be $1.79 billion, indicating a 15.27% increase compared to the same quarter last year [1] Annual Estimates - For the annual period, earnings are anticipated at $3.08 per share and revenue at $7.3 billion, reflecting increases of +12.41% and +17.23% respectively from the previous year [2] - Changes in analyst estimates are crucial as they indicate the evolving business trends, with positive revisions suggesting analyst optimism about the company's profitability [2] Zacks Rank and Valuation - Trip.com holds a Zacks Rank of 1 (Strong Buy), with a historical average annual return of +25% for 1 ranked stocks since 1988 [3] - The company is currently trading at a Forward P/E ratio of 15.91, which is lower than the industry average Forward P/E of 16.8 [3] - The Leisure and Recreation Services industry, part of the Consumer Discretionary sector, has a Zacks Industry Rank of 169, placing it in the bottom 33% of over 250 industries [3]

Core Viewpoint - Trip.com (TCOM) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks Consensus Estimate for Trip.com projects earnings of $3.08 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 12.4% [5]. - Over the past three months, the consensus estimate for Trip.com has risen by 4.9%, indicating a trend of increasing earnings estimates [5]. Impact of Earnings Estimates on Stock Prices - Changes in earnings estimates are strongly correlated with near-term stock price movements, largely due to institutional investors who adjust their valuations based on these estimates [3]. - The upgrade in Trip.com's rating suggests an improvement in its underlying business, which is expected to drive the stock price higher as investors respond to this trend [3][7]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - The upgrade of Trip.com to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for price appreciation in the near term [6][7].

Investment Rating - The report initiates coverage on Trip.com Group-S (09961 HK) with a "Recommend" rating and a target price of HK$506 [1] Core Views - Trip com is a leading one-stop online travel platform in China with a strong domestic market position and high growth potential in international markets [1] - The company's domestic business is stable with a competitive advantage in high-income high-consumption and sticky users while its international business is expected to drive future growth [1][7] - The report forecasts revenue growth of 15 3% 14 0% and 13 5% for 2024-2026 with non-GAAP net profit growth of 20 6% 15 6% and 13 5% respectively [1][8] Business Model and Industry Overview - Online travel platforms (OTAs) are the optimal business model in the travel industry with leading players like Booking and Airbnb achieving high operation margins [13] - The OTA industry in China has grown rapidly with a CAGR of 34 4% from 2013-2019 and is expected to reach RMB2 53 trillion in 2023 [16] - The industry is divided into three main segments: online transportation online accommodation and online vacation with transportation having the highest online penetration rate [18] Domestic Market - Trip com has a strong domestic market position with a deep supply chain and high-quality user base [1][7] - The company has a competitive advantage in high-star hotels and a strong "air + hotel" integrated service offering [47] - Trip com is expanding its user base by targeting younger users and lower-tier cities while also enhancing its content-to-transaction conversion capabilities [51][53] International Market - China's outbound travel penetration rate is relatively low at 12% in 2019 compared to the global average of 26% indicating significant growth potential [1][59] - Trip com is focusing on outbound travel and its overseas platforms (Skyscanner and Trip com) to drive international growth [1][7] - The company's overseas strategy includes leveraging its brand user acquisition and low commission rates to compete with established players like Booking and Expedia [1][7] Financial Performance - Trip com's revenue and non-GAAP net profit reached RMB44 51 billion and RMB13 07 billion in 2023 representing a 24 8% and 100 3% increase compared to 2019 [1][30] - The company's gross margin improved to 81 8% in 2023 while its sales expense ratio decreased to 20 7% reflecting improved operational efficiency [32] Valuation and Forecast - The report values Trip com at 20x 2024 PE with a target market cap of HK$345 7 billion representing a 31% upside from the current price [1][8] - Revenue is expected to grow at a CAGR of 14 3% from 2024-2026 with non-GAAP net profit growing at a CAGR of 16 4% over the same period [8]

Core Viewpoint - Trip.com Group Limited has successfully completed a US$1.5 billion offering of convertible senior notes due 2029, which will be used for debt repayment, overseas business expansion, and working capital needs [1][2]. Group 1: Notes Offering Details - The offering includes an additional US$200 million due to the full exercise of the initial purchasers' option [1] - The notes will bear an interest rate of 0.75% per year, payable semiannually starting December 15, 2024, and will mature on June 15, 2029 [2] - The initial conversion rate is set at 15.0462 American depositary shares (ADSs) per US$1,000 principal amount, translating to an initial conversion price of approximately US$66.46 per ADS [2] Group 2: Regulatory and Legal Information - The notes and the ADSs deliverable upon conversion have not been registered under the Securities Act and may only be offered to qualified institutional buyers [3] - This press release does not constitute an offer to sell or a solicitation of an offer to purchase any of these securities [3] Group 3: Company Overview - Trip.com Group Limited is a leading global one-stop travel platform, providing a comprehensive suite of travel products and services [5] - The company operates under various brands, including Ctrip, Qunar, Trip.com, and Skyscanner, and aims to enhance the travel experience for users [6]

Core Viewpoint - Investors are increasingly seeking growth stocks, particularly in the financial sector, to achieve above-average returns, with Trip.com (TCOM) identified as a promising growth stock due to its favorable metrics and Zacks Rank [1][6]. Earnings Growth - Trip.com has a historical EPS growth rate of 12.8%, with projected EPS growth of 12.4% for the current year, surpassing the industry average of 12.2% [3]. Cash Flow Growth - The company exhibits a remarkable year-over-year cash flow growth of 374.8%, significantly higher than the industry average of -12.3%. Over the past 3-5 years, Trip.com has maintained an annualized cash flow growth rate of 20.9%, compared to the industry average of -2.5% [4]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Trip.com, with the Zacks Consensus Estimate for the current year increasing by 5.1% over the past month [5]. Overall Positioning - Trip.com has achieved a Growth Score of B and a Zacks Rank of 2, indicating strong potential for outperformance in the growth stock category, making it an attractive option for growth investors [6][7].

Group 1 - Trip.com currently has an average brokerage recommendation (ABR) of 1.14, indicating a consensus between Strong Buy and Buy, with 88.9% of recommendations being Strong Buy and 5.6% being Buy [1][6] - The Zacks Consensus Estimate for Trip.com has increased by 5.1% over the past month to $3.08, reflecting analysts' growing optimism regarding the company's earnings prospects [6] - The Zacks Rank for Trip.com is 2 (Buy), suggesting a positive outlook based on earnings estimate revisions [6] Group 2 - Brokerage recommendations often exhibit a strong positive bias, with a ratio of five "Strong Buy" recommendations for every "Strong Sell," indicating potential misalignment with retail investors' interests [2][4] - The Zacks Rank is a quantitative model based on earnings estimate revisions, which has shown a strong correlation with near-term stock price movements, making it a more reliable indicator than ABR [5] - The ABR may not always be up-to-date, while the Zacks Rank reflects timely changes in earnings estimates, providing a more accurate indication of future price movements [5]

证券研究报告 | 2024年06月06日 携程集团-S（09961.HK） 优于大市 拟发行 13 亿美元可转换优先票据，积极拓展海外业务  公司研究·公司快评  社会服务·旅游及景区  投资评级：优于大市（维持） 证券分析师： 曾光 0755-82150809 zengguang@guosen.com.cn 执证编码：S0980511040003 证券分析师： 钟潇 0755-82132098 zhongxiao@guosen.com.cn 执证编码：S0980513100003 证券分析师： 张鲁 010-88005377 zhanglu5@guosen.com.cn 执证编码：S0980521120002 联系人： 杨玉莹 0755-81982942 yangyuying@guosen.com.cn 事项： 公司公告：携程集团拟发售13亿美元以现金结算的可转换优先票据（+2亿美元票据选择权），预期6月 7日或前后完成发售。票据年利率为0.75%，每半年付息，2029年6月到期。初始转换率为每1000美元票 据本金额兑换15.0462股美国存托股，即每股约66.46美元，行权时间为到期前最后50个交 ...

SINGAPORE, June 4, 2024 /PRNewswire/ -- Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) ("Trip.com Group" or the "Company"), a leading one-stop travel service provider of accommodation reservation, transportation ticketing, packaged tours, and corporate travel management, today announced the pricing of its previously announced offering (the "Notes Offering") of US$1.3 billion in aggregate principal amount of convertible senior notes due 2029 (the "Notes"). The Notes have been offered to persons reasonably ...