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Valued at a market cap of $163.8 billion, Booking Holdings Inc. (BKNG) provides online and traditional travel and restaurant reservations and related services. The Norwalk, Connecticut-based company's travel-related offerings cover hotel rooms, airline tickets, rental cars, vacation packages, cruises, 'things to do' at customer destinations, and travel insurance.
This travel service provider's shares have massively outpaced the broader market over the past 52 weeks. BKNG has rallied 44% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17.6%. However, the stock is up 1.6% on a YTD basis, slightly lagging behind SPX’s 1.7% gain during the same time frame.
Zooming in further, Booking Holdings has outperformed the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 20% return over the past 52 weeks and 3% decline on a YTD basis.
Shares of BKNG closed down marginally after its Q4 earnings release on Feb. 20 despite delivering significantly better-than-expected Q4 adjusted earnings of $41.55 per share and revenues of $5.5 billion. Moreover, the bottom line advanced by a notable 29.8% year-over-year, while the top line grew 14% from the year-ago quarter. Robust growth in gross bookings, room nights, and alternative accommodations benefited the company.
Adding to the positives, adjusted EBITDA improved 26% year-over-year to $1.8 billion, supported by a 10% reduction in operating expenses, highlighting the company’s effective cost-management strategies.
For the current fiscal year, ending in December, analysts expect BKNG’s EPS to grow 11.7% year over year to $209.03. The company’s earnings surprise history is promising. It exceeded the Wall Street estimates in each of the last four quarters.
Among the 35 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on 20 “Strong Buy,” two “Moderate Buy,” and 13 “Hold” ratings.
This configuration is modestly more bullish than three months ago, with 18 analysts suggesting a “Strong Buy” rating.
On Feb. 24, Susquehanna maintained a “Buy” rating on Booking Holdings and raised its price target to $6,000, which indicates an 18.8% potential upside from the current levels.
The mean price target of $5,416.60 represents a modest 7.3% upside from BKNG’s current price levels, while the Street-high price target of $6,300 suggests an upside potential of 24.8%.
