Travel stocks rallied Thursday as Trip.com Group received analyst kudos following its Q4 results late Wednesday. Royal Caribbean led cruise stocks higher after hoisting its 2024 outlook. Booking Holdings tumbled Friday following its late report Thursday.
Booking Earnings
Norwalk, Conn.-based Booking Holdings earnings and revenue growth slowed for the third consecutive quarter as the company reported a 29% Q4 earnings increase to $32 per share adjusted. Total revenue rose 18% to $4.8 billion.
FactSet analysts expected earnings of $29.68 per share on $4.7 billion in revenue.
Gross travel bookings increased 16% to $31.7 billion while room nights booked rose 9% from last year. Excluding impacts from the Israel, room nights booked increased 11%.
Booking Holdings a recorded a loss of $276 million during the quarter after a Dutch court in January ordered the company to join the Netherlands pension fund for the travel industry. It also incurred a $530 million loss related to a draft decision from the Spanish competition authority and antitrust watchdog. Both impacts were excluded from the company's adjusted results.
Booking's board of directors declared a quarterly cash dividend of $8.75 per share, which is payable March 28, 2024.
The company expects growth to moderate going forward as operations normalize following the COVID pandemic. Booking guided Q1 gross bookings to grow between 5% and 7% on an 11% to 13% revenue increase. Fiscal 2024 earnings are expected to increase 15% while revenue and gross bookings grow about 7%.
BKNG stock fell 10.2% Friday, dropping below its 50-day line and erasing its 4.3% gain during Thursday trading hours. Shares are extended following an early December breakout.
Booking stock slipped 1.2% so far this year through Friday.
Trip.com Earnings Rocket
Trip.com late Wednesday cleared Q4 expectations, reporting 411% earnings growth to 54 cents per share adjusted on 98% revenue growth to $1.44 billion. FactSet analysts expected earnings of 31 cents per share on $1.42 billion in revenue.
The Shanghai-based company announced that domestic hotel reservations leapt 130% from last year. Outbound hotel and air reservations recovered to over 80% of their pre-COVID levels for the same period in 2019. Meanwhile, international air passage volume recovered 60% for the same period.
Executive Chairman James Liang in the release said that China saw a significant rise in travel sentiment, while CEO Jane Sun noted the global travel industry "has shown remarkable resilience and is poised to sustain its growth trajectory."
Mizuho lifted its price target on TCOM stock to $60 from $55 early Thursday, writing that profitability came in significantly ahead of expectations driven by recovering travel demand and efficiency gains. Meanwhile, the company's two major constraints for outbound travel, capacity and visas, started easing. Mizuho expects Trip.com's margins to continue expanding. The firm maintained a buy rating on shares.
Barclays Thursday morning also raised its price target on TCOM to $60 from $56 and maintained an overweight rating on the shares, writing that the Q4 results validated the company's strong competitive positioning and execution.
UBS noted early Thursday Trip.com's growth outlook is "solid" with margin upside in 2024. The firm lifted its target on TCOM stock to $52 from $48 and kept a buy rating on the stock.
TCOM stock rallied 6.6% Thursday to break out above a 43.59 buy point for a cup base. Shares added another 6% Friday.
Trip.com leapt 31.5% in 2024.
Royal Caribbean Lifts Cruise Stocks
Elsewhere, Royal Caribbean towed fellow cruise stocks higher after hiking its 2024 earnings guidance Wednesday night, citing stronger-than-expected vacation demand.
The cruise line now expects full-year earnings per share of $9.90-$10.10, up 40 cents from its February target of a record $9.50-$9.70. About 15 cents of that increase reflects an improved revenue outlook in the first quarter.
"Since our last earnings call, robust demand for our vacation experiences has significantly exceeded our initial expectations," CEO Jason Liberty reported.
Royal Caribbean at the beginning of February cleared fourth-quarter estimates and projected a 40% adjusted earnings jump for 2024 at the time.
Carnival Cruise in early February also announced it is almost sold out for the first half of the year after seeing record booking volumes since November. However, the company expects to take a 7- to 8-cent per share hit to its adjusted 2024 earnings due to rerouting around the Red Sea conflict. Carnival expects most of the profit impact to occur in Q2 and said it has not seen any effects to its booking trends. The cruise line giant reported better-than-expected Q4 earnings and revenue in late December.
RCL stock leapt 6.7% Thursday, putting shares just below their 50-day moving average. Shares inched down 0.5% Friday.
CCL stock climbed 3.4% back to its 200-day line. Carnival rose a fraction Friday.
Rival Norwegian Cruise Line rose 1.4% Thursday. NCLH stock ticked 1% lower Friday just below its 10-day line.
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