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Booking Holdings stock receives Outperfrom by JPM, gains in market share

EditorEmilio Ghigini
Published 26/02/2024, 09:56
Updated 26/02/2024, 09:56

On Monday, JMP Securities updated its outlook on Booking Holdings (NASDAQ:BKNG), increasing the price target to $3,950 from the previous $3,600 while maintaining a Market Outperform rating. This adjustment follows Booking Holdings' release of its fourth-quarter earnings, which showed revenue and adjusted EBITDA slightly above consensus estimates.

Despite softer-than-expected guidance due to normalizing travel demand, the company's shares experienced a downturn in after-market trading. Prior to the earnings report, the stock had seen an increase of over 11%.

Booking Holdings' recent performance highlighted several positive aspects, such as a higher proportion of room nights booked through direct channels, which is expected to contribute to future leverage. Additionally, the company observed year-over-year improvements in performance marketing ROI during the fourth quarter. Management also noted the resilience of global leisure travel demand, with no current signs of consumers downgrading their travel choices.

The company has made significant strides in its growth strategies, witnessing momentum in its alternative accommodations sector and an uptick in consumers booking connected trips. Booking Holdings is also believed to have gained market share in hotel and alternative accommodations spaces. These developments indicate a strong position for the company.

JMP Securities' optimistic stance is based on the belief that Booking Holdings is the leading travel platform capable of enduring industry shifts and is poised for further market share gains as the year progresses. The $3,950 price target is derived from an enterprise value to estimated 2025 EBITDA multiple of around 15 times.

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