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- Booking Holdings (NASDAQ:BKNG) shares are climbing in premarket trading, underpinned by an upgrade at Benchmark to Buy from Hold as resilience in the European travel industry coupled with better-than-expected growth in APAC should offset any impact from a stalled global economy, enabling Booking (BKNG) to outperform the consensus estimates for the next 18+ months.
- Benchmark views its prior Hold rating as inconsistent with its long-term view for the travel site as “inroads anticipated over the medium term” are expected in North America.
- As with all the names Benchmark follows, the firm is only focusing on the fundamentals and assuming a stable macro as any changes in consumer demand would alter its forecasts. The firm also suspects that a “decent amount of optimism” is already baked into the stock price.
- Having said that, there should be some lodging ADR tailwinds for Booking (BKNG), particularly in EMEA, that should drive outperformance in gross bookings, ultimately flowing down to EBITDA.
- The firm has set a $4,700 target price for BKNG, representing 20x the 2025 estimated cash EPS of $235, or 16x adjusted EBITDA.
