TripAdvisor board shakeup could drive up shares, Bank of America says
TripAdvisor is poised to grow as activist investors step up pressure on the travel booking company to adopt a more fluid, active strategy to fuel growth, according to Bank of America. The bank’s research arm upgraded TripAdvisor to buy from neutral and raised its 12-month price target on the stock to $15 from $14. That implies about 51% upside from Thursday’s close. “We see a clearer catalyst path for value realization driven by accelerating activist engagement and rising strategic optionality across the portfolio,” analysts Nafeesa Gupta and Justin Post said Friday in a note to clients. Activist hedge fund Starboard Value took a 9% stake in TripAdvisor in July, aiming at a turnaround. Earlier this week, it added four of its members to TripAdvisor’s board. The leadership shift “raises the likelihood that TRIP evaluates transactions across its portfolio at a time when the market, in our view, is undervaluing its faster‑growing segments,” Bank of America wrote. The leadership shakeup came after Starboard last month sent a letter to TripAdvisor’s leadership criticizing the stock’s sluggish performance. The stock is off 29% in the past three months through Thursday. Starboard urged TripAdvisor to explore a sale of its businesses, either together or individually. TripAdvisor’s faster-growing businesses are its online excursions marketplace Viator and its dining reservation platform TheFork. The Bank of America analysts estimate the two could be worth a combined $2.5 billion or more, roughly twice the $1.3 billion enterprise value of TripAdvisor’s flagship platform. “With recent Board changes increasing the likelihood of asset‑level actions, TRIP’s 3x ’27 EBITDA multiple (near trough) highlights potential for Viator and TheFork to be valued independently rather than within a declining Hotel meta‑search business,” the analysts wrote. The Bank of America call is contrarian. Of the 17 analysts covering TripAdvisor, only three have a buy or strong buy on the stock.
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