Overview
BofA Securities has reduced its price target on Trip.com Group Limited (NASDAQ: TCOM) to $78.00 from $85.00, while leaving its Buy rating intact. The travel platform was trading at $63.97 at the time of the note, implying notable upside from current market levels.
Rationale for the change
The primary driver behind BofA's adjustment is a downward revision to profit margin expectations. The bank cut its non-GAAP net profit estimates for 2026-2027 by 10-12%, reflecting a more conservative view on future margins. BofA's work translates those expectations into a valuation that now uses 16x 2026 price-to-earnings and 14x 2027 price-to-earnings multiples, which underpin the new $78 target - a step back from the prior $85 projection.
Despite the reduction, BofA analyst Joyce Ju remains constructive on Trip.com's broader outlook. The firm still anticipates robust top-line growth of 13-14% in 2026-2027. That growth forecast is anchored in several factors BofA lists as supportive: resilient travel demand within China, continued strength in consumer and supply chain penetration, and ongoing momentum in Trip.com's overseas expansion efforts.
Operational and margin context
Data reported alongside the note highlights the company's operating efficiency: Trip.com posts gross profit margins of 80.72%, according to InvestingPro data cited in the research. That level suggests the business retains strong underlying margin characteristics even as BofA trims forward net-profit projections.
Regulatory backdrop
Complicating the near-term picture is an investigation by China's market regulator into potential antitrust violations. Trip.com confirmed receipt of a notice from the State Administration for Market Regulations and said it will cooperate while maintaining normal business operations. BofA acknowledged the probe creates short-term uncertainty and some ambiguity about the competitive landscape, but the bank concluded that markets may be overpenalizing the company for those risks.
Recent results and peer analyst moves
Trip.com reported a strong third quarter, with net revenue growth of 16% year-over-year and non-GAAP operating growth of 12% year-over-year, both beating consensus expectations. Those results prompted several broker actions earlier: BofA initially had raised its target to $85 while keeping a Buy rating; other firms also moved targets higher in response to the quarter. Mizuho lifted its target to $84 citing revenue growth that outpaced global peers and exceeded forecasts, while Benchmark raised its target to $82 highlighting strong international performance. By contrast, CFRA retained a Hold rating and an $80 target, projecting moderation in revenue growth ahead due to global economic headwinds.
Implications
The combination of strong recent financial performance, pronounced gross margins, and ongoing regulatory review creates a mixed risk-reward profile. BofA's downgrade of forward profit estimates and lower applied multiples indicate a more cautious near-term earnings view, yet the firm continues to expect mid-teens growth and maintains a positive stance on the company's strategic trajectory.
Summary of facts
- BofA lowered Trip.com price target to $78 from $85 and kept a Buy rating.
- BofA cut 2026-2027 non-GAAP net profit estimates by 10-12% and now values the stock at 16x 2026 PE and 14x 2027 PE.
- Trip.com was trading at $63.97 when the note was published; InvestingPro shows gross margins of 80.72%.
- BofA expects 13-14% growth in 2026-2027, citing resilient China travel demand, deeper consumer and supply chain penetration, and overseas momentum.
- Trip.com is under investigation by China's State Administration for Market Regulations for potential antitrust issues; the company said it will cooperate and continue normal operations.
- Trip.com posted Q3 net revenue growth of 16% and non-GAAP operating growth of 12% year-over-year, beating consensus.
- Other analysts have recently set targets: Mizuho $84, Benchmark $82, CFRA $80 (Hold).