Benchmark raised its rating on Booking Holdings (NASDAQ:) from Hold to Buy, and set a new price target of $4,700 per share.
Despite current economic concerns and elevated investor expectations, Benchmark analysts believe the company’s increased resilience in EMEA, coupled with strong growth in Asia Pacific and Latin America, will enable it to outperform consensus over the next 18 months.
Benchmark noted that “our previous rating was inconsistent with our long-term view,” highlighting their confidence in Booking’s ability to gain market share and outperform expectations.
Analysts see no derailment of the stock’s gains story in the near term and expect further forays into North America in the medium term. The new price target represents 20 times estimated 2025 cash earnings per share of $235 or 16 times adjusted EBITDA.
Benchmark acknowledges that the timing of this upgrade may seem questionable given ongoing economic concerns and anecdotal indicators pointing to lower trading in major European markets.
However, they believe previous guidance appears broadly conservative. They expect 7% room night growth, above the high end of the Street’s 6% forecast. They also expect tailwinds for average room rates in EMEA, which should drive overall bookings and boost EBITDA.
However, they “suspicion that there is a fair amount of optimism already in the stock.”
Benchmark expects gross bookings to be about $2.5 billion above Street estimates, thanks to an expected acceleration in room night growth. The firm also highlights potential benefits from the Genius loyalty program and AI-driven improvements, though these are long-term drivers.
“We also note that Booking was the only major travel company to indicate that
“Changes in the booking window in the fourth quarter, a phenomenon that has been cited with at least some gradual frequency, although we do not expect any significant headwinds if this narrative continues or increases,” the company wrote.
This strategic update reflects Benchmark’s belief in Booking’s strong fundamentals and its ability to capitalize on market opportunities despite economic uncertainty.
