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HOUSE_OVERSIGHT_014636

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Tax Policy: TRIP has a ~25% tax rate. Trump’s tax plan calls for a reduction in the business tax rate from 35% to 15%, with elimination of most corporate tax deductions/credits (except for the R&D credit). While it’s unclear what elements of the tax plan will eventually be executed, Trump’s intent is clear and we believe companies with the highest tax rate have the most to gain. We see less incremental benefit to many of the global companies who already enjoy optimized tax rates (22% average tax rate across our coverage), but many companies will have more incentive to bring back Intl profits for buybacks with lower US tax rates. Catalysts: 4Q’16 Earnings (early February} will feature initial 2017 guidance. TripAdvisor noted on the 3Q’16 earnings call that 2017 EBITDA margin will decline further from 2016 levels as ad spend ticks up to re-accelerate growth, however it is unclear how much margin deterioration TripAdvisor will guide to. We think the deterioration in the guide will be higher than the Street’s expectations, driving further downside estimate revisions. Latest report: TripAdvisor: 2017 PM Level Outlook 1Q risks: There is downside risk to Street estimates if hotel shopper growth comes in below expectations, mobile monetization gap widens, and if initial 2017 guidance disappoints. We remain cautious on IB as an attempt to solve a very large problem: the continued transition of users consuming TripAdvisor’s content on their mobile phones instead of their desktops. On mobile phones, users are much less likely to transact or click on an ad than on desktops. A risk to the short thesis: There has been frequent speculation in the press that TripAdvisor may be a takeout candidate in the rapidly consolidating online travel market, with Priceline frequently named as the likely suitor. Company Description: TripAdvisor is the largest global online travel media company with over millions of members and hundreds of millions of user reviews. The company's portfolio of we

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