On Monday, Oppenheimer adjusted its outlook for Booking Holdings (NASDAQ:BKNG) shares, increasing the price target to $4,600 from the previous $4,200, while maintaining an Outperform rating on the stock. The firm anticipates that Booking Holdings will exceed its second-quarter guidance due to robust performance in a high-demand environment.
The discussion among investors focuses on the appropriate price-to-earnings (P/E) ratio as Booking Holdings approaches approximately 1.1 billion nights booked for 2024, with growth rates expected to stabilize in the mid to high single-digit range.
Oppenheimer suggests that Booking Holdings' increased direct traffic reduces its exposure to changes in Google (NASDAQ:GOOGL)'s platform, potentially warranting a P/E multiple similar to other industry leaders in the accommodation sector.
Comparable companies such as Marriott (MAR), Hilton (HLT), and Hyatt (H) currently trade at average P/E multiples of 32.6 and 28.6 based on estimated earnings for 2024 and 2025, respectively. In contrast, Booking Holdings trades at a lower multiple of 23 times and 20 times its estimated earnings for the same periods.
Despite expectations of a deceleration in booked nights for the third quarter due to more challenging comparisons, Oppenheimer foresees potential upside to Booking Holdings' earnings guidance for 2024, which could exceed 14% growth. This optimism is partly based on improved marketing efficiency.
The revised price target of $4,600 is based on a 23 times multiple of the estimated earnings for 2025, reflecting confidence in the company's future performance and market position.
In other recent news, Booking Holdings has been the focus of multiple analyst adjustments. B.Riley raised its price target for the company to $4,900, citing strong business fundamentals and the potential for above-market growth in revenue. Benchmark also upgraded the company's shares from Hold to Buy, setting a new price target of $4,700 based on the company's increasing resilience in various global markets.
Barclays, too, increased its price target for Booking Holdings to $4,300, citing robust performance. BTIG maintained a neutral stance, predicting a room night growth of approximately 7% for the next quarter.
Erste Group upgraded Booking Holdings to a buy rating, praising the company's high operating margin and strong global presence. Argus also raised its price target for Booking Holdings to $4,342, reflecting a positive outlook on online travel companies and the company's strong presence in Europe.
Booking Holdings' recent financial developments include a 9% increase in room nights and a 17% rise in revenue, reaching $4.4 billion in the first quarter of 2024. The company's adjusted EBITDA also increased by 53% to approximately $900 million. Still, the company anticipates a slowdown in room night growth for the next quarter due to geopolitical issues. These are recent developments that investors should be aware of.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.