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Why TripAdvisor's Stock Is Up 10% Today

By Rich Duprey – Jun 1, 2020 at 11:07AM

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The online travel site is riding a wave of optimism.

What happened

Shares of TripAdvisor (TRIP -1.30%) were surging over 10% Monday morning as prospects for a reopened economy would have people traveling again, both in the U.S. and overseas.

So what

Stay-at-home orders in response to the coronavirus pandemic have crushed the travel and hospitality industries, but the number of new COVID-19 cases is easing and there is more hope for a vaccine being developed, which would assist a return to normalcy just in time for summer travel.

Couple looking at a map.

Image source: Getty Images.

Now what

It's not apparent people will begin booking vacations right away, but a Barron's article this morning that favorably mentioned TripAdvisor said SunTrust Robinson Humphrey analyst Naved Khan believes travel is going to rebound, especially in Europe, which has him bullish on Booking Holdings (BKNG -2.13%).

Travel-related stocks in general were higher this morning, including those of cruise ship operators like Carnival (CCL -23.25%) and upscale adventure cruiser operator Lindblad Expeditions (LIND -9.14%), which also received a positive Barron's mention over the weekend. Its stock is up 17% in morning trading.

TripAdvisor is likely riding those upbeat sentiments higher. Having lost nearly 70% of its value since last September during its "darkest days," the online travel site may be seen as undervalued. SunTrust's Khan has a $24 price target on TripAdvisor, some 25% above where the stock closed last Friday.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Booking Holdings and TripAdvisor. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Carnival Corporation Stock Quote
Carnival Corporation
CCL
$7.03 (-23.25%) $-2.13
TripAdvisor, Inc. Stock Quote
TripAdvisor, Inc.
TRIP
$22.08 (-1.30%) $0.29
Booking Holdings Stock Quote
Booking Holdings
BKNG
$1,643.21 (-2.13%) $-35.71
Lindblad Expeditions Holdings, Inc. Stock Quote
Lindblad Expeditions Holdings, Inc.
LIND
$6.76 (-9.14%) $0.68
Akero Therapeutics, Inc. Stock Quote
Akero Therapeutics, Inc.
AKRO
$34.05 (14.26%) $4.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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