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On Friday, B.Riley maintained a positive outlook on Booking Holdings (NASDAQ:BKNG) shares, raising its price target to $4,900 from the previous $4,400 while keeping a Buy rating on the stock. The adjustment comes as the firm updates its discounted cash flow (DCF) analysis to extend into 2025, along with quarterly estimates for that year.
The firm's optimism is rooted in the company's solid underlying business fundamentals. According to the analyst, Booking Holdings is well-positioned to achieve above-market growth in revenue, partly due to the expansion of its connected trip initiatives. These initiatives are expected to continue scaling and contribute to the company's growth trajectory.
Additionally, the analyst anticipates that Booking Holdings could experience margin improvements due to increased marketing efficiency. The deployment of GenAI technology is also seen as a potential catalyst for further operational efficiency and margin expansion over the coming years.
The analyst forecasts that Booking Holdings' substantial and increasing free cash flows (FCFs) will support share buyback programs. These buybacks are expected to drive healthy double-digit growth in both earnings per share (EPS) and free cash flow per share.
The valuation of Booking Holdings at 15.1 times its 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) is considered attractive, suggesting a favorable risk/reward balance for investors.
In other recent news, Booking Holdings has been the subject of significant financial developments. The company's first-quarter 2024 results showed a 9% increase in room nights and a 17% rise in revenue, reaching $4.4 billion. Adjusted EBITDA also increased by 53% to approximately $900 million.
However, Booking Holdings anticipates a slowdown in room night growth for the second quarter due to geopolitical issues. Benchmark upgraded Booking Holdings from Hold to Buy on the analyst front, setting a new price target of $4,700.
Barclays raised its price target for the company to $4,300, citing robust performance. BTIG maintained a neutral stance, predicting a room night growth of approximately 7% for the second quarter. Erste Group upgraded Booking Holdings to a buy rating, citing the company's high operating margin and strong global presence.
Lastly, Argus 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. These are recent developments that investors should be aware of.
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