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Stock Analysis & Ideas

Recovering Travel Scene to Benefit Booking Stock

Online travel services player Booking Holdings (NASDAQ: BKNG) is riding on significant improvement in travel and booking trends as travel restrictions across countries ease.

The company stands to benefit from the global shift from offline to online bookings. Moreover, a major chunk of Booking’s revenues is generated from international markets.

Shares of the stock, which have lost around 15% in the past 12 months, spiked more than 8.2% in the morning of Thursday, March 10. This gain followed an upgrade from Oppenheimer analyst Jed Kelly, who pulled up his ratings from Hold to a Buy.

Expert Opines

The travel sector was the hardest hit from the pandemic during the past couple of years. Nonetheless, Kelly believes that focused investing into the recovery of economic activity in this sector will help the company sustain a consistent P/E multiple, possibly in the low 20s.

Efforts such as enhancing its payments options and connected trips, along with several brand and loyalty initiatives will help Booking capture more share in the online travel services market. With these observations, the analyst set his price target at $2,560.

Kelly’s confidence in the stock’s near-term prospects was buoyed from his view of “looser international restrictions driving a faster recovery, offsetting pockets of geo-political volatility.”

The analyst also raised his 2023 growth estimates for revenue to 4% and for earnings per share (EPS) to 10%. Moreover, the analyst projects 65% growth in earnings per share during the period between 2021 and 2023.

Booking is also looking keenly into expanding its presence in the market for Online Travel Agents (OTA). Interestingly, Kelly believes that Booking stands to benefit most when the Russia-Ukraine war comes to an end.

Website Visit Trends Look Encouraging

Another interesting facet to analyzing the company’s recent performance lies in the trend of visits to its website. Being an online travel service company, the business thrives on website traffic.

With the help of TipRanks’ new website analyzing tool, we found that in the month of February, estimated visits to booking.com from all over the world were 5.2% up from January.

Moreover, looking at the comparison with February of last year, the number grew 14.77%.

Wall Street consensus is cautiously optimistic about Booking, with a Moderate Buy rating based on 16 Buys and seven Holds. The BKNG stock projections point at an average price target of $2,734.71.

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