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On Wednesday, JMP analysts raised their price target on Booking Holdings (NASDAQ:BKNG) to $5,700 from $5,600 while reaffirming a Market Outperform rating. This aligns with the broader Wall Street sentiment, as InvestingPro data shows a strong Buy consensus (1.77) and eight analysts recently revising earnings estimates upward. The revision follows Booking Holdings’ report of strong first-quarter results, surpassing revenue and adjusted EBITDA expectations, with the company maintaining its "GREAT" financial health score of 3.53. The company’s second-quarter guidance exceeded consensus estimates, although, excluding a four-point expected benefit from foreign exchange (FX), the top-line guidance was roughly in line with predictions.
Booking Holdings has adjusted its full-year FX impact forecast, now anticipating a roughly two-point tailwind, as opposed to the previously expected three-point headwind. This change is set to drive higher nominal 2025 gross booking value (GBV) and revenue, especially when contrasted with recently lowered estimates. The company’s impressive performance is reflected in its 9.47% year-over-year revenue growth and industry-leading gross profit margin of 86.63%. Want deeper insights? InvestingPro offers extensive financial metrics and exclusive analysis in its comprehensive Pro Research Report. However, on a constant currency basis, the mid-point guidance for 2025 has been slightly reduced, which led to a decline in the company’s shares in aftermarket trading.
The company noted stable global travel demand but pointed out softer trends within the U.S., attributed to decreased inbound travel and increased cost-consciousness among consumers, particularly at lower income levels. In response to macroeconomic uncertainty, management indicated a potential increase in investments to grow its U.S. market share, capitalizing on Booking Holdings’ strong financial position compared to its competitors.
Booking Holdings has also managed to enhance its advertising spend in traditional marketing channels, achieving economically favorable returns on investment (ROIs), which contributed to incremental volume. The company continues to see attractive ROIs in its social marketing efforts as well.
Analysts at JMP highlighted the resilience of Booking Holdings’ performance, largely driven by geographic diversification. With a substantial market capitalization of $160.24 billion and trading at a P/E ratio of 28.43, they believe that Booking Holdings is the most well-positioned company within the online travel sector to navigate the volatile macroeconomic and industry landscape. The analysts expect the company’s market share gains to continue. The increased price target to $5,700 is based on higher estimates than previously modeled, factoring in a 50% probability of a U.S. recession. For comprehensive valuation analysis and additional insights, check out the detailed company report available on InvestingPro.
In other recent news, Booking Holdings Inc. reported its first-quarter 2025 earnings, significantly surpassing Wall Street expectations. The company achieved an adjusted earnings per share (EPS) of $24.81, well above the forecast of $17.45, and generated revenue of $4.76 billion, exceeding the anticipated $4.59 billion. This performance marks a 22% year-over-year increase in adjusted EPS and an 8% growth in revenue compared to the same quarter last year. Despite these strong financial results, the stock experienced a decline in aftermarket trading. The company also reported a notable increase in adjusted EBITDA, which rose by 21% to $1.1 billion, supported by growth in alternative accommodations and flight bookings. Additionally, Booking Holdings has launched new AI-powered features to enhance customer experience. Looking ahead, the company expects mid to high single-digit growth in gross bookings and revenue for the full year, with adjusted EPS anticipated to grow in the low to mid-teens.
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