Booking Holdings Downgraded by Jefferies
Date: Wednesday
Source: Investing.com
Jefferies has downgraded Booking Holdings (NASDAQ:BKNG) from “buy” to “hold” due to concerns over slowing room night growth and increased market risks.
Key Points:
- Jefferies’ assessment reflects a deceleration in global room night growth, projected to decline from 11.0% in 2023 and 6.1% in 2024 to 4.5% in 2025 and 3.6% in 2026.
- Analysts attribute the slowdown to a normalization of demand trends as worldwide Room Nights approach pre-pandemic levels.
- Online penetration growth of nearly 25% from 2019 to 2024 is expected to moderate, impacting overall growth rates.
- Projections for Booking Holdings’ end markets suggest a growth decline to 4.4%/3.3% in 2025/2026, down from 10.9%/6.1% in 2023/2024.
- Jefferies anticipates BKNG’s room night growth will fall short of consensus estimates by 0.9% in 2025 and 3.3% in 2026.
- There are concerns regarding a potential reversal in high booking windows and increased competition from alternative accommodations.
- The price target for Booking Holdings has been reduced to $4,200 from $4,350, correlating with a 20x multiple on the 2025 price-to-earnings ratio, reflective of BKNG’s historical valuation excluding the COVID-19 period.
This downgrade highlights the impact of competitive pressures and anticipated slowdowns on Booking Holdings’ future profitability and growth.
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