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BTIG maintains Neutral on Booking Holdings stock amid outlook

EditorAhmed Abdulazez Abdulkadir
Published 2024-06-27, 07:44 a/m
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On Thursday, BTIG affirmed its Neutral stance on Booking Holdings (NASDAQ:BKNG), as the company's shares approached the $4,000 mark, signaling a potential all-time high. The firm's assessment comes amid a backdrop where concerns over consumer behavior seem to be diminishing, prompting a closer examination of Booking Holdings' prospects for the second quarter and preliminary expectations for the third quarter.

The analysis by BTIG suggests that while gross reservation volumes for Booking Holdings may see some moderation following a boost in April due to the timing of Easter, the company is likely to surpass its own conservative guidance. For the second quarter, BTIG predicts room night growth of approximately 7%, which is slightly above the company's guidance of 4-6%. This forecasted growth aligns with Booking Holdings' historical performance, where the company typically exceeds its guidance.

Looking ahead to the third quarter, the comparison with the previous year's growth of 15% presents a challenge. However, if Booking Holdings follows a normal seasonal pattern, year-over-year growth is expected to be between 7-9%, aligning with the consensus of a 7% increase.

Booking Holdings' performance is being closely monitored by industry observers as it navigates the fluctuating consumer sentiment and travel industry dynamics. The company's ability to potentially exceed its guidance in the second quarter and achieve steady growth in the third quarter will be key factors in its ongoing financial health and market positioning.

In other recent news, Booking Holdings has been the subject of several analyst upgrades and robust earnings reports. Erste Group upgraded Booking Holdings to a buy rating, highlighting the company's impressive operating margin and strong global presence. In addition, Argus raised its price target for Booking Holdings to $4,342, citing the company's strong presence in Europe and the sustained demand for travel.

Booking Holdings reported a significant growth in its first quarter 2024 results. The company saw a 9% year-over-year increase in room nights, with nearly 300 million booked. Its revenue rose by 17% to reach $4.4 billion, and adjusted EBITDA increased by 53% to approximately $900 million. Moreover, the company's adjusted earnings per share saw a substantial growth of 76% year-over-year.

However, despite these strong results, Booking Holdings expects a slowdown in room night growth for the second quarter due to geopolitical issues in the Middle East. The company's projections for the second quarter include bookings growth of 3-5%, revenue growth of 4-6%, and adjusted EBITDA between $1.7 billion and $1.75 billion.

InvestingPro Insights

As Booking Holdings (NASDAQ:BKNG) nears a significant milestone in its share price, insights from InvestingPro provide additional context to the company's financial health and market sentiment. With a market capitalization of $136.2 billion and a P/E ratio standing at 29.28, the company reflects a substantial presence in the market. Notably, the P/E ratio adjusted for the last twelve months as of Q1 2024 is 27.59, suggesting a more favorable valuation when considering near-term earnings growth. Moreover, the impressive gross profit margin of 84.65% for the same period indicates efficient operations and a strong competitive edge in the Hotels, Restaurants & Leisure industry.

InvestingPro Tips highlight that management's aggressive share buybacks and the company's low price volatility make it an attractive consideration for investors seeking stability. Additionally, analysts' recent downgrades in earnings expectations for the upcoming period could signal caution, yet the company is still expected to be profitable this year. For those interested in further analysis and tips, InvestingPro offers additional insights on Booking Holdings. With a total of 12 additional InvestingPro Tips available, investors can delve deeper into the company's financials and market potential. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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