Booking Holdings stock holds Buy rating, $6300 target by TD Cowen

On Tuesday, TD Cowen maintained a positive stance on Booking Holdings (NASDAQ:BKNG), reiterating a Buy rating and a price target of $6,300.00. Currently trading at $5,136.39 with a market capitalization of $170.68 billion, the company stands as a prominent player in the Hotels, Restaurants & Leisure industry. According to InvestingPro analysis, the company maintains impressive gross profit margins of 84.67%. Analyst Kevin Kopelman pointed to several key factors supporting the bullish outlook, including the company’s unique position as the only major online travel agency (OTA) demonstrating year-over-year advertising cost leverage.

Kopelman highlighted Booking Holdings’ new multi-year cost efficiency plan as a significant factor that could provide management with strong talking points during the upcoming earnings call. With revenue growth of 11.74% in the last twelve months and a solid financial health score rated as "GREAT" by InvestingPro, the company appears well-positioned despite near-term challenges. He also urged investors to look beyond the challenging Q1 revenue comparison, which faces headwinds exceeding 650 basis points due to factors like Easter timing, foreign exchange rates, and the leap year.

The analyst’s confidence in Booking Holdings is further bolstered by recent industry trends and the performance of other OTAs. Notably, both Expedia (NASDAQ:EXPE) and Airbnb (ABNB) surpassed their Q4 guidance, with nights booked accelerating significantly. These companies also projected normalized growth for Q1, excluding foreign exchange and leap year effects, that would surpass their forecasts for the full year 2024.

Despite Booking Holdings’ shares rising by 5.5% since Expedia’s report, Kopelman believes there is room for further growth. He compared this increase to Expedia’s 17.3% and Airbnb’s 14.4% gains during the same period. The surge in travel demand reported by Expedia and Airbnb in December is expected to be reflected in Booking Holdings’ results, which could confirm the company’s market share gains and leading position in the growth of alternative accommodations.

Kopelman’s endorsement of Booking Holdings comes ahead of the company’s quarterly financial report in just two days, where he anticipates the firm will deliver strong results, mirroring the robust performance of other OTAs and the overall industry’s upward momentum. Trading at a P/E ratio of 34.51, investors seeking deeper insights into BKNG’s valuation and growth prospects can access comprehensive analysis through InvestingPro’s detailed research reports, which include 12 additional ProTips and extensive financial metrics.

In other recent news, Priceline, a key player in the online travel industry, has welcomed Sejal Amin as its new Chief Technology Officer, a move aimed at bolstering its technological advancements and customer experience. In parallel, Booking Holdings, Priceline’s parent company, has seen its stock price target adjusted by multiple analysts. Truist Securities raised its price target slightly from $4,700 to $4,720, maintaining a hold rating, while Cantor Fitzgerald cut its target to $4,900 from $5,100, keeping a neutral stance. JMP Securities, on the other hand, assigned a ’Market Outperform’ rating to Booking Holdings, citing durable travel demand and market share gains.

In addition to these developments, Booking Holdings has recently emerged victorious from a legal battle against Ryanair DAC, where a federal court overturned a previous verdict that held the company liable for violating a computer fraud law. This court decision has relieved Booking Holdings from potential damages and further legal complications.

These recent developments highlight the dynamic and evolving landscape of the online travel industry. As Booking Holdings continues to navigate these changes, its resilience and strategic decisions, such as the appointment of a new CTO for Priceline and the successful resolution of legal challenges, will be critical in shaping its future trajectory.

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