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Key Takeaways
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Booking Holdings widened the lower end of its full-year outlook amid concerns about the U.S. travel industry.
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Analysts said the company should be able to offset any decline in U.S. travel demand with improvements in global travel.
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The company's first-quarter earnings topped analysts' estimates.
Booking Holdings (BKNG) widened its full-year outlook amid concerns about the U.S. travel industry, but analysts say the company's international operations should help counter a decline in U.S. travel bookings.
Booking on Tuesday reported better-than-expected earnings, but widened the lower ends of its projected ranges for full-year revenue and gross bookings, saying its business "could be impacted by the increased uncertainty in the geopolitical and macroeconomic environment." The company now expects both measures to grow by mid- to high-single digits, compared to just high-single digits previously.
The company has seen a "moderation in trends for inbound travel into the U.S." so far this year, particularly from Canada, CFO Ewout Steenbergen said, according to a transcript provided by AlphaSense.
U.S. travelers have also decreased their length of stays, and the CFO said Booking has seen "some evidence of a bifurcated economy in the U.S." as demand for hotels with higher star ratings have seen demand stay more stable than their lower-star counterparts.
Analysts Say Booking's Global Footprint Could Help Offset US Weakness
Analysts from JPMorgan and UBS lifted their price targets to $5,360 and $5,750, respectively, following the report. The JPMorgan analysts said that Booking's operations across the globe should help the company offset any weakness in U.S. travel activity.
UBS analysts also suggested Booking could be able to continue growing revenue and profits even if hotel room bookings slow, as the company pushes further into offering booking options for "alternative accommodations, flights, ground transportation, and attractions."
Jefferies analysts were more cautious, with a "hold" rating and $5,000 price target. They wrote Wednesday that they are keeping their "hold" rating on concerns "macro uncertainty could limit medium-term growth and stock upside."
Booking shares were little changed near $4,953 in recent trading. They've added about 45% in the past 12 months.
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