Expedia (Buy, $146 PO) Stock view: 1Q faces tough comps, but should clear way for strength into ‘18 We think 1Q expectations are somewhat muted as Expedia has highlighted several earnings headwinds in early 2017, including incremental cloud migration spend, higher marketing spend and, recently, potential ADR pressure. 1Q’17 earnings will face the toughest room night growth comps, though Expedia expressed optimism on trends through January on the 4Q call. Comps ease during the rest of the year for Expedia, which we see as a positive set up for the stock. We think Expedia will reiterate its 10- 15% EBITDA growth outlook and .Expedia remains our top 2017 summer (2Q/3Q) travel idea. We currently forecast 20% y/y room night growth in 2Q/3Q, though the comp is 1600bps easier vs. 1Q and street growth expectations could be higher. The ongoing benefit of conversion rate improvements, the Easter shift into 2Q (noted as 1% impact in 2Q’16), as well as the benefit of more aggressive marketing spend should aid 2Q growth. Additionally, prior to 1Q’17 earnings, Expedia will begin to disclose HomeAway online bookings and room nights, which we think may drive y/y room night growth 200- 300bps higher (we forecast HomeAway room nights up 50% y/y in 2017 vs. core OTA room nights up 18%). We think investors will also view HomeAway disclosure positively if the data indicates that the HomeAway transition remains on track and provide visibility into potential EBITDA acceleration in 2018. STR data suggests hotel fundamentals deteriorated modestly in the US through initial March readings, but improved slightly in Europe through February. However, Expedia’s CEO commented in a recent interview with the Financial Times that international tourism to the US (Expedia’s key market) has decelerated following the introduction of Trump’s travel bans, which may be a downside risk to 1Q bookings and revenues. This mirrors ForwardKeys data from early March that after Trump’s exec