On Friday, TD Cowen reiterated a Buy rating on Booking Holdings (NASDAQ:BKNG) stock and increased the price target from $6,300.00 to $6,500.00. The firm’s analyst, Kevin Kopelman, highlighted the company’s strong performance, noting a significant beat in overnight bookings, which saw a 13% increase. Growth was observed across all geographical regions, including Europe and the United States, with both exceeding 10% acceleration. Average daily rates (ADRs) also improved. Currently trading at $5,151.04, the company maintains impressive gross profit margins of 85.87% and has demonstrated solid revenue growth of 11.11% over the last twelve months. InvestingPro analysis reveals 12 additional key insights about BKNG’s market position and growth potential.
Booking Holdings outperformed competitors Airbnb (NASDAQ:ABNB) and Expedia (NASDAQ:EXPE) by adding more nights in the fiscal year 2024 than both companies combined, contributing to 78% of the group’s EBIT growth for FY24. Although quarter-to-date (QTD) growth has slowed, it remains above the company’s growth projections for FY24. With an EBITDA of $8.18 billion and a market capitalization of $171.72 billion, InvestingPro data shows BKNG maintains a strong financial health score of 3.48 (rated as "GREAT"). Kopelman also noted that while the margin increase for FY25 is expected to be less than 100 basis points, it falls slightly below expectations due to reinvestment, it is still off a higher FY24 base.
The company has significantly bolstered its shareholder return program, adding $20 billion to its buyback authorization, which now totals $27.7 billion. Additionally, Booking Holdings raised its dividend by 10% to $9.60 per quarter for FY24. The anticipated total capital returns for FY24 stand at $7.7 billion, equating to 97% of free cash flow (FCF). Projections for FY25 suggest even higher returns at $9.2 billion, surpassing the projected FCF by 105%. The company’s robust financial position is reflected in its levered free cash flow of $7.89 billion and moderate debt levels, as highlighted in the comprehensive Pro Research Report available on InvestingPro.
Kopelman estimates free cash flow, less stock compensation per share, to reach $251 in FY25 and $292 in FY26. With analysts forecasting EPS of $206.38 for FY25 and the stock trading at a P/E ratio of 33.83, this financial outlook emphasizes the firm’s confidence in Booking Holdings’ continued growth and profitability, as well as its commitment to returning value to its shareholders.
In other recent news, Booking Holdings has seen a series of analyst adjustments following its earnings reports and guidance updates. RBC Capital Markets increased its price target for Booking Holdings to $5,900, citing the company’s ability to consistently exceed expectations and its robust growth toolkit. Analyst Brad Erickson highlighted the company’s strong capital returns and growth in direct and mobile bookings. Similarly, Benchmark raised its price target to $5,900, maintaining a "Buy" rating, and noted the company’s guidance meeting the high-end of market expectations despite challenges. Analyst Daniel Kurnos pointed out that Booking Holdings’ strategic focus on reinvestment might result in a conservative margin expansion.
BMO Capital Markets also raised its price target to $5,900, with analyst Brian J. Pitz praising the company’s growth in Gross Bookings and Room Nights. Pitz emphasized the successful expansion into alternative accommodations as a key market strength. Piper Sandler adjusted its price target to $5,120, maintaining a Neutral rating, and noted the company’s solid capital allocation plans. Evercore ISI increased its price target to $5,500, with analyst Mark Mahaney acknowledging Booking Holdings’ strong performance across geographic markets and travel verticals. Despite some conservative guidance due to foreign exchange impacts, the overall outlook for Booking Holdings remains positive according to these recent developments.
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