Booking Holdings is the IBD Stock of the Day Wednesday. Booking stock is trading in above-average volume and approaching a 3,918 buy point from a recently formed flat base chart pattern, according to MarketSurge.
On the stock market today, Booking stock rose 2.3% to close at 3,876.41. The online travel company behind brands like Booking.com and Priceline is gaining on a strong day for stocks overall, helped by a cooler-than-expected inflation report. But Booking may also be benefiting from recent bullish commentary on travel demand. Analysts at Bernstein Research expect strong summer travel in Europe, as reported by Bloomberg, helped by events such as Taylor Swift's Eras Tour and the Summer Olympics in Paris.
Booking stock has gained just under 10% so far this year, pacing behind a 14% gain for the S&P 500. But Booking Holdings is coming off a stronger-than-expected first quarter earnings report in early May.
Booking Stock: Debating Travel Demand
Shares of Booking Holdings surged 76% last year amid a strong rebound in travel demand. Rival online travel agencies Expedia Group and Airbnb posted strong years as well.
But investors are debating whether strong travel trends will hold up. Late last month, Booking shares fell, along with other travel stocks, after American Airlines cut its sales guidance for the second quarter.
Still, market watchers largely expect strong summer travel. Wedbush analysts wrote in a client note on May 23 that "alternative accommodation trends remain favorable, hotel performance continues to show modest growth with more strength internationally, and recent industry commentary suggests a healthy summer travel season ahead."
Analysts at Bernstein, meanwhile, recently called out strong trends for Europe. Bernstein analysts Richard Clarke and Sabrina Blanc wrote Tuesday that Booking Holdings, as well as several hotel stocks, could benefit from a "Taylor Swift lift," according to Bloomberg. The ultra-popular singer's Eras Tour is playing shows in Europe through August. Swift's Eras Tour racked up a total economic impact exceeding $10 billion when it rolled through 20 U.S. cities last year, according to estimates from the U.S. Travel Association.
There are also major sporting events such as Summer Olympics in Paris and UEFA European Football Championship in Germany that could help boost travel demand.
Bernstein analysts expect "all hotel groups and online travel agencies to benefit with their European business," as quoted in Bloomberg.
Booking Holdings Expectations For Q2
During a call with analysts in May, Booking Holdings Chief Executive Glenn Fogel said the company "continue(s) to see resiliency in global leisure travel demand, including healthy growth for travel on the books that's scheduled to take place during our peak summer travel season."
However, he cautioned that those trips are still cancelable. Further, the company is anticipating "some deceleration" in room night growth in the second quarter compared to its Q1 growth. Booking's Q1 revenue also benefited from the earlier timing of the Easter holiday.
Booking's second quarter ends this month, with results expected late in July. Analysts project that the company will post a 2% increase in earnings to an adjusted $38.43 per share. Sales are seen increasing 5.5% to $5.76 billion, according to FactSet.
Revenue growth for Booking Holdings has slowed as it comes up against more difficult comparisons from last year's recovery in travel demand. Booking stock's revenue jumped 27% year-over-year in its June 2023 ending quarter.
Booking Stock Technical Scores
Meanwhile, Booking stock on Wednesday is pushing ahead of a potential early entry point for more aggressive investors at 3,853. Shares jumped from BKNG's 21-day exponential moving average with Wednesday's action, according to MarketSurge.
Wednesday has been a strong day overall for online travel agency stocks. Expedia stock is ahead 1.3% at 124.49 in recent action. Airbnb shares are also up 1.3%, at 149.68.
Meanwhile, Booking stock has an IBD Composite Rating of 95 out of a best-possible 99 as of Wednesday, according to the IBD Stock Checkup tool. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
The score makes Booking stock the top ranked among 20 in the Leisure-Travel Booking industry group tracked by Investor's Business Daily. Airbnb and Expedia rank fifth and sixth, respectively. Booking Holdings was also the IBD Stock of the Day on June 4.
Further, Booking's IBD Relative Strength Rating is a strong 86 out of 99.
