Company Reports

While a strained consumer presents potential risk to Booking's near-term travel demand, we see the company exhibiting solid financial health and a stout network advantage. We expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in the Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

Although we see Booking’s network edge (the source of its narrow moat) as industry-leading, we plan to lower our $3,700 per share fair value estimate by a mid-single-digit percentage, due to an increasingly ominous consumer environment, which we think can pressure near-term demand for Booking.

While inflation and credit market concerns present potential risks to Booking's near-term travel demand, we see the company exhibiting solid financial health and a stout network advantage. We expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in the Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

We plan to increase our $3,520 fair value estimate for narrow-moat Booking by a mid-single-digit percentage to account for higher 2024 revenue and lower long-term marketing expenses. We see shares as appropriately valued, but would not require much of a discount to recommend this high-quality travel operator.

While inflation and credit market concerns present potential risks to Booking's near-term travel demand, we see the company exhibiting solid financial health and a stout network advantage. We expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in the Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

After moving 12% higher year-to-date through Feb. 22, Booking shares traveled down 9% in after-hours trading, as the company’s 16% bookings growth missed our 21% forecast for the fourth quarter. That said, we don’t plan to materially change our $3,450 fair value estimate, as Booking’s January room night growth was above 6% despite facing tough comparisons, instilling confidence in our preprint 8% booking growth forecast for 2024. Also, the company’s network edge, which is the source of our narrow-moat rating, appears intact, providing visibility into this high-single-digit booking growth rate enduring over the intermediate term.

While inflation and credit market concerns present overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

We plan to lift our $3,310 fair value estimate for narrow-moat Booking by 3%-4% to account for a stronger finish to 2023 than previously expected. Investors should give Booking shares a review, as this high-quality company does not often trade at much discount to our intrinsic value.

While inflation and credit market concerns present overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

Booking’s shares traveled more than 10% higher in after-hours trading following stronger second-quarter bookings and stout marketing efficiencies. We plan to increase our $3,130 fair value estimate by around a mid-single-digit percentage because of higher demand and lower marketing cost in 2023, leaving shares just below our revised valuation.

While inflation and credit market concerns present overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

While inflation and credit market concerns present overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

Booking Holdings saw strong bookings and marketing return on investment in its first quarter, harmonizing with our existing forecast. As a result, we don't plan to meaningfully change our $3,100 per share fair value estimate, leaving shares undervalued.

While inflation and currency concerns continue to be overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

While inflation and currency concerns continue to be overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

We don’t plan to materially change Booking’s $3,050 fair value estimate, as stronger near-term sales growth is offset by higher spending over our 10-year forecast. We reiterate that Booking’s network (source of its narrow moat) is strengthening and that shares offer investors a compelling entry point.

While COVID-19, inflation, and currency concerns continue to be overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.

Booking shares moved 5% higher, as its third-quarter performance supported our view for travel demand increases in 2023 (despite macro headwinds), a strengthening network advantage (source of its narrow moat), and Exemplary capital allocation rating.

Despite enduring travel demand into the fall of 2022 and our view that it can continue into 2023, investor concerns around future trips and credit availability have grounded share price performance across the industry. As a result, we see meaningful opportunities to book investment stays in Sabre, Accor, Booking Holdings, and Norwegian, which trade at 64%, 42%, 44%, and 54% discounts to our $15, EUR 37.50, $2,900, and $28 fair value estimates, respectively.

While COVID-19, inflation, and currency concerns continue to be overhangs on Booking's near-term travel demand, we see the company exhibiting solid financial health. Further, we expect Booking's global online travel agency leadership position to increase over the next decade, driven by a healthy position in Asia-Pacific, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, experiences, flights, and payments, all of which are backed by leading marketing and technology scale.