Expedia Group, Inc.

EXPE Details

Reported 9% y-o-y Top-line Growth: Expedia Group, Inc. (NASDAQ: EXPE) is an online travel company which has its own travel platform and aims to provide travel-details and travel related services to the consumers.

Q3FY19 Operational Highlights for the Period ended 30 September 2019:  Expedia Group, Inc. declared its quarterly results, wherein the company reported revenue of $3,558 million as compared to $3,276 million in Q3FY18, driven by 9% growth in gross bookings which came in at $26,927 million. Operating income and net income declined by 9% and 22% on y-o-y basis at $609 million and $409 million, respectively. Selling and marketing expense stood at $1,600 million, up 11% on y-o-y basis, representing 46.7% of the total revenue. Technology and content expense came in at $440 million as compared to $404 million in previous corresponding period. As on 30 September 2019, the business reported more than 1.4 million properties available on its core lodging platform.


Q3FY19 Income Statement Highlights (Source: Company Reports)

Balance Sheet Highlights: The company reported cash, cash equivalents, restricted cash and short-term investments at $4.9 billion as on September 30, 2019. The company reported intangible assets and goodwill at $1,843 million and $8,104 million, respectively.  Total assets were reported at $21,381 million at the end of Q3FY19.

Valuation Methodology: Price to Earnings Multiple Approach

Price to Earnings Based Valuation (Source: Thomson Reuters)

Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months

Stock Recommendation: The stock of EXPE closed at $113.73 with a market capitalization of ~$16.47 billion. The stock is currently quoting below the average of its 52-week high-low of $144 and $93.53. The stock has generated negative returns of 17.71% and 2.50% in the last six months and one year, respectively. The group is focusing on expanding its global presence by leveraging substantial investments across technology, operations, brand building and supplier relationships.Considering the aforesaid facts, we have valued the stock using a relative valuation method, i.e., price to earnings multiple. For the matter,we have taken the peer group - Booking Holdings Inc (NASDAQ: BKNG), TripAdvisor Inc (NASDAQ:TRIP), Trip.com Group Ltd (NASDAQ: TCOM), etc., and arrived at a target price of lower double-digit upside (in % terms). Hence, we recommend a “Buy” rating on the stock at the closing price of $113.73, up 3.36% as on 23 January 2020.

 
EXPE Daily Technical Chart (Source: Thomson Reuters)
 

Chevron Corporation

CVX Details

Targets a Spending Program of $20 billion for FY20:  Chevron Corporation (NYSE: CVX) operates in the integrated energy segment and produces and transports crude oil and natural gas. The business is also engaged in refining, marketing and distribution activities of fuels and lubricants. Recently, the company made an announcement of an organic capital and exploratory spending program worth $20 billion in FY20. The latest budget program aims for a strong portfolio of both upstream and downstream investments. The above program comprises operation across its major capital project at TCO in Kazakhstan and in the Permian Basin, followed by a queue of deepwater prospects across the Gulf of Mexico.

Q3FY19 Operational Highlights for the Period ended 30 September 2019:  CVX announced its quarterly results, wherein the company reported total revenues and other income at $36,116 million as compared to $43,987 million in the previous corresponding quarter. Net income stood at $2,580 million as compared to $4,047 million in Q3FY18. The company reported capital and exploratory expenditures of $15.0 billion in the first nine months of FY19 as compared with $14.3 billion in the previous corresponding period.Cash flow from operations for the first nine months of FY19 stood at $21.7 billion, up marginally from $21.5 billion reported in the previous corresponding period. 


Q3FY19 Income Statement Highlights (Source: Company Reports)

Valuation Methodology: Price to Earnings Multiple Approach

Price to Earnings Based Valuation (Source: Thomson Reuters)

Note: All forecasted figures and peers have been taken from Thomson Reuters, NTM-Next Twelve Months
Stock Recommendation: The stock of CVX closed at $113.10 with a market capitalization of ~$213.85 billion. The stock is currently quoting at the lower band of its 52-week trading range of $110.42 to $127.34. The stock has generated negative return 3.81% and 9.97% in the last three months and six months, respectively. In order to deliver strong shareholder’s return, the business intends to invest across the privileged assets. Considering the aforesaid facts, we have valued the stock using a relative valuation method, i.e., price to earnings multiple. For the matter,we have taken the peer group - Exxon Mobil Corp (NASDAQ: XOM), ConocoPhillips (NASDAQ: COP), Marathon Oil Corp (NASDAQ: MRO), etc., and arrived at a target price of lower double-digit growth (in % terms). Hence, we recommend a “Buy” rating on the stock at the closing price of $113.10, up 0.18% as on 23 January 2020.

 
CVX Daily Technical Chart (Source: Thomson Reuters)

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