SunTrust Cuts Booking Holdings Price Target On Worsening Travel Trends

Booking Holdings Inc BKNG has withdrawn its first-quarter guidance citing the worsening impact of coronavirus.

The withdrawal of its outlook, which was issued less than two weeks back, suggests that the fast-spreading coronavirus is taking a toll on the company’s core European market, according to SunTrust.

The Booking Analyst

Naved Khan maintained a Buy rating for Booking Holdings, while reducing the price target from $2,250 to $2,100.

The Booking Thesis

The global travel landscape is rapidly deteriorating. Demand is likely to continue contracting as the virus spreads across developed economies and the second quarter could be the worst hit, Khan said in the note.

Booking Holdings indicated that the virus outbreak escalated over the past week and suggested incremental travel weakness in Europe and North America.

See Also: Cancel Reservations For Booking Holdings Stock Until Coronavirus Outbreak Subsides, Argus Says In Downgrade

The analyst said that the virus could pressure the company’s results over the next few quarters. He reduced the 2020 estimates for bookings, revenues, and EBITDA from $94,294 to $63,656, from $14,983 million to $9,664 million and from $5,913 million to $3,078 million, respectively.

Khan expects travel declines to bottom during the second quarter and suggested long-term investors to look beyond the coronavirus hit. He added that the “intrinsic value of the business remains very compelling” for long-term investors and that Booking Holdings’ performance could rebound in 2021, “propelled by a sticky, best-in class offering.”

BKNG Price Action

Shares of Booking Holdings were trading up 0.95% at $1,542.28 at time of publication.

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