On Friday, UBS analyst Lloyd Walmsley increased the price target for Booking Holdings (NASDAQ:BKNG) to $5,960 from $5,560, while reaffirming a Buy rating on the stock. Walmsley’s assessment follows Booking Holdings’ report of 261 million Room Nights booked, marking a 13% year-over-year growth. This performance suggests that the company is gaining market share at the expense of its competitors. With a market capitalization of $170 billion and impressive gross profit margins of 86%, InvestingPro data shows Booking Holdings maintains a "GREAT" financial health score, supporting its position as a prominent player in the Hotels, Restaurants & Leisure industry.
Booking Holdings exhibited varied growth across different regions. Europe saw a low double-digit increase, Asia experienced mid-teen growth, the Rest of the World (RoW) jumped by 20%, and the United States grew by 10%. Despite this strong regional performance, management’s guidance for the first quarter of 2025 was considered conservative by UBS, anticipating Gross Bookings to rise by 5-7%, revenue to increase by 2-4%, and Adjusted EBITDA to be between $800 million and $850 million. These projections also factor in approximately a 3% impact from foreign exchange rates. Trading at a P/E ratio of 33.8 and having achieved revenue growth of 11.1% in the last twelve months, InvestingPro analysis suggests the stock is currently fairly valued.
The company’s outlook for the first quarter takes into account various factors, including currency headwinds, the shift in Easter timing, and the leap day impact from the previous year. However, UBS suggests that there is room for upward revisions to these estimates throughout the year. The potential for growth is attributed to strategic initiatives under the company’s control, such as the Connected Trip, the Genius Loyalty program, and the Alternative Accommodations segment, which continues to outpace the overall business.
In summary, UBS’s revised price target reflects confidence in Booking Holdings’ ability to leverage its internal growth levers and possibly outperform the conservative forecasts set by the company’s management for the upcoming quarter.
In other recent news, Booking Holdings has been the focus of several analyst updates following its financial performance and strategic initiatives. TD Cowen has reiterated a Buy rating and raised its price target to $6,500, citing strong growth in overnight bookings and an improved shareholder return program. RBC Capital Markets increased its price target to $5,900, noting the company’s tendency to exceed expectations and its robust growth toolkit. Benchmark also raised its target to $5,900, maintaining a Buy rating and highlighting the company’s strategic reinvestment efforts.
BMO Capital Markets has set a price target of $5,900, driven by Booking Holdings’ impressive growth in Gross Bookings and Room Nights. The firm also mentioned the company’s expansion into alternative accommodations and the use of artificial intelligence to boost profitability. Meanwhile, Piper Sandler raised its target to $5,120, maintaining a Neutral rating, while acknowledging the company’s consistent performance and future guidance.
Booking Holdings’ financial outlook includes a projected 100-basis point EBITDA margin expansion for 2025, with Gross Bookings estimates revised upwards. The company anticipates constant currency growth of approximately 8% year-over-year for both revenue and bookings in 2025, along with mid-teens growth in adjusted earnings per share. Analysts have taken note of the company’s strategic focus on reinvestment and transformation, which are seen as efforts to strengthen its market position.
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