Expedia Inc’s (EXPE) New Leadership Choice for CEO Is the Right Move: Piper Jaffray

Expedia's Board of Directors Knew Just the Man to Appoint as New CEO- and This Top Analyst Agrees


Though former President and Expedia Inc (NASDAQ:EXPE) Dara Khosrowshahi is driving off into the distance to lead Uber, current Chief Financial Officer and Vice President of Operations Mark Okerstrom was promoted yesterday in Khosrowshahi’s stead to guide the online travel giant. Additionally, Okerstrom stands to enter the company’s Board of Directors- a board which saw fit to only consider Okerstrom, and Okerstrom alone, as the best man to take on this role.

Echoing the Board’s vote of confidence, Okerstrom stands as “the clear choice for CEO,” says Piper Jaffray Michael Olson, who is positive in his conviction that this was “the right move” on Expedia’s part. Especially considering the giant’s series of “moving parts” in a series of years that have seen the company vie for takeovers of Travelocity, Wotif, Orbitz, and HomeAway,” the analyst highlights it is a noteworthy advantage that “Okerstrom has been deeply involved in the integration and creation of synergies from these deals.”

Singing the praises of the company’s savvy leadership shift, the analyst reiterates an Overweight rating on shares of EXPE with a $173 price target, which represents a close to 21% increase from where the stock is currently trading.

“Additionally, investors know Okerstrom better than any other execs at Expedia and is generally well respected by the investor base. Mark Okerstrom has been with Expedia since 2006 and has served as EVP of Operations and Chief Financial Officer since September 2011,” explains Olson.

Anticipating calm waters ahead in this changeover, Olson asserts from a bullish stance: “We believe the pick will provide a seamless transition and is both the logical and best choice to head the company. Importantly, Okerstrom is extremely well known by investors and has been intimately involved in orchestrating the integration of the company’s recent acquisitions (Orbitz, Travelocity, HomeAway). If the goal of Expedia’s board is to create a smooth transition and continue to ride the recent momentum for the company, Okerstrom was the clear choice.”

Michael Olson has a very good TipRanks score with a 65% success rate and a high ranking of #61 out of 4,629 analysts. Olson yields 18.1% in his yearly returns. When recommending EXPE, Olson realizes 15.3% in average profits on the stock.

TipRanks analytics indicate EXPE as a Strong Buy. Out of 17 analysts polled by TipRanks in the last 3 months, 16 are bullish on Expedia stock while 1 remains sidelined. With a return potential of 22%, the stock’s consensus target price stands at $175.69.

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