What To Expect From Booking Holdings Stock?

-6.05%
Downside
2151
Market
2021
Trefis
BKNG: Booking Holdings logo
BKNG
Booking Holdings

Booking Holdings (NASDAQ: BKNG), the world’s largest online travel agency that offers services from lodging to airline tickets to car rentals, is scheduled to announce its fiscal second-quarter results on Wednesday, August 3. We expect the company’s stock to likely trade slightly higher with revenues and earnings beating market expectations marginally. BKNG saw record gross bookings in Q1 against the 2019 pre-pandemic quarter. In fact, the company mentioned in its first-quarter earnings call that global leisure travel trends have continued to improve in the second quarter, even with the current macroeconomic uncertainties, and that it is looking forward to a busy summer travel season ahead. All this indicating to setting expectations of upside recovery in the stock price levels which have been down nearly 20% this year.

Booking Holdings derives a majority of its revenue from the European market, which has undertaken a series of economic measures in response to Russia’s invasion of Ukraine. To add to this, inflation and staff shortages could further threaten growth in Europe and could also have a modest impact on BKNG’s business in the upcoming quarters.

Our forecast indicates that Booking Holdings’ valuation is $2021 per share, which is 6% higher than the current market price. Look at our interactive dashboard analysis on Booking Holdings Earnings Preview: What To Expect in Q2? for more details.

(1) Revenues expected to be slightly ahead of the consensus estimates

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Trefis estimates Booking Holdings’ Q2 2022 revenues to be around $4.4 Bil, a slight increase from the consensus estimate level. In Q1 2022, the company’s gross travel bookings jumped nearly 130% y-o-y to $27.3 billion, which was up 7% against Q1 2019. In addition, the number of room nights booked on the platform in Q1 2022 doubled from the prior-year quarter. Its total revenue soared 136% y-o-y to $2.7 billion – a massive rebound from extremely difficult conditions in the year-earlier quarter. In April, room nights increased by 10% against 2019 with strength across all regions, with Asia being the only market that was still below 2019 levels. Even so, bookings in Asia have improved from -35% in Q1 2019 to down high-teens percentage in April. The company’s gross bookings also grew over 30% in April as compared to the 2019 levels. Management did not provide guidance for the second quarter but was confident that there will be an operating profit.

For the full-year 2022, we expect Booking Holdings revenues to grow 60% y-o-y to $17.5 billion.

(2) EPS likely to be marginally above the consensus estimates

Booking Holdings’ Q2 2022 earnings per share (EPS) is expected to come in at $18.05 as per Trefis analysis, marginally beating the consensus estimate of $17.56. The year-over-year recovery in revenue translated to much better profitability, and the travel company reversed a year-ago loss with an adjusted net income of $161 million – indicating an almost full recovery.

(3) Stock price estimate higher than the current market price

Going by our Booking Holdings’ Valuation, with an earnings per share estimate of around $101.44 and a P/E multiple of 19.9x in fiscal 2022, this translates into a price of $2021, which is 6% higher than the current market price.

It is helpful to see how its peers stack up. BKNG Peers shows how Booking Holdings stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

With inflation rising and the Fed raising interest rates, Booking Holdings has fallen 21% this year. Can it drop more? See how low can BKNG stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Aug 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 BKNG Return -1% -21% 30%
 S&P 500 Return 0% -14% 84%
 Trefis Multi-Strategy Portfolio 0% -13% 242%

[1] Month-to-date and year-to-date as of 8/2/2022
[2] Cumulative total returns since the end of 2016

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