Booking Holdings Shares Boosted By Q4 Guidance: The Sell-Side Reacts

Booking Holdings Inc BKNG shares are soaring despite the online travel agency reporting a third-quarter earnings miss Monday.

The company posted Q3 earnings of $37.78 per share, missing estimates by 39 cents. Sales were in-line with consensus estimates at $4.8 billion. The company issued strong fourth-quarter earnings guidance. 

The Sell-Side Reacts

◘ Raymond James analyst Justin Patterson maintains an Outperform rating on Booking Holdings with a price target lifted from $1,970 to $2,160. (See his track record here.) 

As Booking Holdings laps 2018’s headwinds, the company will have a more consistent cadence of 10-percent revenue and EBITDA growth and a slight quickening of EPS growth due to share buybacks, the analyst said.  

“Given investor fears around decelerating growth and potential margin compression, we believe these results are a step in the right direction toward alleviating concerns around long-term potential growth rates."

◘ Wedbush analyst James Hardiman maintains an Outperform rating with a $2,500 price target.

The OTA's strong guidance should help counter the bear case, which is predicated upon a series of industry and competitive headwinds driving a deceleration in fundamentals, the analyst said. 

“While increased spending more than offset better-than-expected topline momentum in Q3, investors would appear to be happy with this trade-off." 

◘ Jefferies analyst Brent Thill maintains a Buy rating with a $2,400 price target.

Thill said he continues to believe that Booking Holdings is the best fundamental story in online travel.

“Q3 was another quarter with above-average growth- a confirmation that BKNG is taking market share from competitors,” the analyst said. 

◘ D.A. Davidson analyst Tom White maintains a Neutral rating and raised the price target from $1,980 to $2,000.

Direct bookings remain a key long term priority for CEO Glenn Fogel, the analyst said. 

“We can’t help but speculate whether, given BKNG’s long-term strategic focus on direct/repeat traffic, some sort of broad loyalty offering across the BKNG brand portfolio might be in the works." 

Price Action:

Booking Holdings shares were trading higher by 5.32 percent at $1,970.72 at the time of publication Tuesday. 

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Photo courtesy of Booking Holdings.