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Truist raises Booking Holdings stock target to $4700, maintains Hold

Published 07/11/2024, 03:38 am
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On Wednesday, Truist Securities updated their analysis on Booking Holdings (NASDAQ:BKNG), increasing the price target to $4,700 from the previous $4,100. This adjustment comes while the firm continues to hold a Hold rating on the stock.

The revision follows Booking Holdings' third-quarter earnings, which prompted Truist Securities to modify their financial projections for the company. The analyst from Truist Securities stated that their 2024 Adjusted EBITDA estimate has been raised to $8.12 billion from $7.73 billion, with earnings per share (EPS) also increasing to $180.60 from $175.49.

Looking ahead to 2025, the Adjusted EBITDA forecast has been adjusted to $8.98 billion from $8.64 billion, and EPS is now expected to reach $213.79, up from the prior estimate of $205.22.

The new price target of $4,700 is derived from applying a 22.0x target multiple, which represents an increase of two turns. This change reflects, in part, an improvement in investor sentiment. The analyst underscored the positive influence of Booking Holdings' specific initiatives, including the Connected Trip and expansion into alternative accommodations.

Despite the positive adjustments, Truist Securities remains cautious about the upcoming third quarter of 2025, anticipating it could present challenging comparisons in Europe. The firm has modeled their estimates with this potential difficulty in mind.

In other recent news, Booking Holdings has been making significant strides in its financial performance. The company showcased robust growth in Q3 with an 8% year-over-year increase in room nights booked, reaching nearly 300 million. Revenue climbed to $8 billion, marking a rise of 9% from the previous year.

Citi and Susquehanna both highlighted Booking Holdings' top-line results stabilization and improved marketing efficiency.

Additionally, Booking Holdings' adjusted EBITDA grew by 12% to $3.7 billion, surpassing projections from both RBC Capital and Susquehanna. The non-GAAP earnings per share also saw a significant uptick, exceeding analysts' expectations. Analysts from Citi, RBC Capital, and Susquehanna have maintained positive ratings on Booking Holdings' stock, with Citi and Susquehanna raising their price targets.

The company's positive outlook is bolstered by its successful capitalization on the rebounding demand, particularly in the European alternative accommodations sector.

InvestingPro Insights

Booking Holdings' recent performance aligns with several InvestingPro insights. The company's market cap stands at an impressive $162.67 billion, reflecting its strong position in the travel industry. This is further supported by an InvestingPro Tip highlighting BKNG as a "prominent player in the Hotels, Restaurants & Leisure industry."

The revised price target from Truist Securities is in line with BKNG's current market performance. An InvestingPro Tip notes that the stock is "trading near 52-week high," with a significant "44.17% price total return over the last three months." This recent surge is consistent with the analyst's increased optimism and raised price target.

However, investors should note that BKNG's P/E ratio of 32.74 suggests it's "trading at a high earnings multiple," according to another InvestingPro Tip. This valuation metric aligns with Truist's cautious Hold rating, despite the increased price target.

For those seeking a more comprehensive analysis, InvestingPro offers 21 additional tips for Booking Holdings, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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