Tripadvisor Targets Raised on Outlook for Plus Subscription Service

Stifel, Bernstein and Evercore raised price targets on Tripadvisor, touting its new Plus subscription service.
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Shares of Tripadvisor  (TRIP) - Get Report jumped Monday after analysts raised price targets on the travel-guidance platform, touting its new direct-to-consumer subscription offering, Tripadvisor Plus. 

Shares of the Needham, Mass., company at last check were up 13% to $45.12.

A Tripadvisor spokesman told TheStreet that the Plus program is a “$99-a-year service to get access to discounts and perks from over 100,000 hotels and more than 400,000 bookable tour and attractions on Tripadvisor.”

The company figures that a subscriber’s first booking will largely pay for the cost of the subscription, he said.

Bernstein analyst Richard Clarke, who rates the company outperform, raised his price target on the shares to $45 from $40.

"Despite being in beta stage, confined to certain areas of the U.S., and without a full basket of direct supply, it is still something to get excited about," Clarke said of the Plus subscription product, according to Bloomberg.

He said that a smaller European travel company, eDreams Odigeo, has reached 664,000 members in three years with a similar product, demonstrating the underlying demand for such an offering. 

Analysts at Stifel maintained their hold rating while increasing the price target to $39 from $26.

"The company expects the product to resonate most, at least initially, with customers booking higher ticket trips, as the value proposition is most obvious for customers who can recoup the $99 annual subscription fee with savings on their initial booking," analyst Logan Thomas said of Tripadvisor Plus. 

Evercore ISI analyst Lee Horowitz kept his in-line rating while raising his price target to $35 a share from $29. 

“Success of Plus would be a meaningful driver of user monetization on the platform supporting the long-dated bull thesis for TRIP that the platform under-monetizes relative to the size of its user base,” Horowitz said. 

Shares of Tripadvisor are up more than 43% in February, and they're headed for their best February stock performance ever, according to Bloomberg.