On Thursday, BTIG maintained a Neutral rating on Booking Holdings (NASDAQ:BKNG) while acknowledging the company's performance that surpassed expectations.
The firm noted Booking Holdings' accelerated growth in the recent quarter, suggesting further potential acceleration in the upcoming fourth quarter (4Q). This observation comes despite previous concerns about shrinking booking windows and moderating demand mentioned in the company's last earnings call.
Booking Holdings reportedly exceeded its guidance in several areas, including room nights and earnings per share (EPS), with notable strength in the Asia-Pacific (APAC) region and better-than-anticipated trends in Europe, which began improving in August.
BTIG's analysis highlighted the company's guidance for 6-8% room night growth in the fourth quarter, which could imply low double-digit growth when considering Booking Holdings' history of outperforming its high-end guidance by an average of two percentage points.
The firm also pointed to a favorable outlook for Booking Holdings' operational efficiency, with room nights expected to increase and fixed operational expenses projected to decrease by 2025. Consequently, BTIG has adjusted its EPS estimate for Booking Holdings from $200 to $208. Moreover, the firm mentioned that bullish investors might see the potential for an EPS reaching $215 or higher.
The update from BTIG reflects a response to Booking Holdings' recent performance and guidance, which seem to counter earlier market uncertainties. The revised EPS forecast by BTIG is a significant takeaway for investors monitoring the company's financial trajectory.
In other recent news, Booking Holdings has been making waves with its third-quarter financial results, which exceeded consensus expectations. The company reported higher room nights, revenue, and adjusted EBITDA than projected, with the latter surpassing expectations by $295 million.
This performance was partially due to robust growth in Europe and a 14% increase in room nights for alternative accommodations, a sector where Booking Holdings is outperforming competitors. Barclays has responded to these developments by raising its price target for Booking Holdings to $5,100.
The company's positive third-quarter results also included an 8% growth in room nights and gross bookings valued at $43.4 billion, a 9% increase from the previous year. Booking Holdings achieved an adjusted profit of $83.89 per share and total revenue of $7.99 billion for the quarter, both of which surpassed analyst expectations.
In response to these developments, several analyst firms have updated their assessments of Booking Holdings. Benchmark reaffirmed its Buy rating for the company, while Oppenheimer raised its price target to $5,000.
On the other hand, Goldman Sachs maintained a Neutral rating, citing the potential for margin expansion and long-term growth. Lastly, Truist Securities initiated coverage of Booking Holdings with a Hold rating, highlighting potential growth avenues despite a forecast of moderating macro travel growth.
InvestingPro Insights
Booking Holdings' recent performance aligns with several key metrics and insights from InvestingPro. The company's revenue growth of 15.81% over the last twelve months supports BTIG's observation of accelerated growth. This is further reinforced by an impressive gross profit margin of 84.57%, which InvestingPro Tips highlight as one of Booking's strengths.
The company's strong financial position is also evident in its market capitalization of $149.65 billion and a P/E ratio of 30.61. An InvestingPro Tip notes that management has been aggressively buying back shares, which could be contributing to the company's solid performance and investor confidence.
Interestingly, while BTIG maintains a Neutral rating, InvestingPro data shows that Booking Holdings is trading near its 52-week high, with a one-year price total return of 61.17%. This substantial return, coupled with the fact that 9 analysts have revised their earnings upwards for the upcoming period, suggests a positive outlook that aligns with BTIG's increased EPS estimate.
For investors seeking a deeper understanding of Booking Holdings' potential, InvestingPro offers 16 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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