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Why TripAdvisor Stock Jumped 11.5% Today

By Howard Smith - Jan 8, 2021 at 4:29PM

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The online travel company got a boost from an analyst.

What happened

Shares of TripAdvisor ( TRIP 2.44% ) jumped 11.5% today after a Deutsche Bank analyst said now is the time to get into the online travel company. 

Stocks in the travel sector have followed the progression of pandemic cases and the vaccines for good reason. Shares of TripAdvisor are up about 35% in the last three weeks as vaccines are rolling out globally.

So what

Today, Deutsche Bank said the company was a "short-term buy," though it continued to call it a long-term hold, CNBC reports. 

woman booking travel flight online at a coffee shop

Image source: Getty Images.

The short-term call, the bank said, is based on a "positive near-term risk/reward skew given direct exposure to a post vaccine travel recovery later this year." 

Now what

The business results of companies in the travel and leisure sector have been held hostage by the direction of the pandemic and economic recovery. Though TripAdvisor shares have soared 75% in the last three months as vaccine efficacy data and approvals rolled out, the one-year gain is still just 17%. 

Consumer travel began picking up over the holiday season, with airline data showing the highest airport traveler volume since the start of the pandemic. That has also likely been a contributor to the record levels of new COVID-19 cases many countries around the world are seeing. 

There's a good chance that vaccines will change the course of the pandemic soon, and travel may pick up nicely later in the year. That premise is at the heart of the Deutsche Bank call on TripAdvisor. But investors should be sure to know the long-term prospects as well, especially with the recent surge in shares probably already including the vaccine-related boost. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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