Booking Holdings’ Stock Down 7% Over Ten Days. What’s Next?
Booking Holdings (NASDAQ: BKNG), the world’s largest online travel agency that offers services from lodging to airline tickets to car rentals, has declined by 7% over the last ten trading days (two weeks) and currently stands at around $1939. In spite of rising prices, the travel sector experienced a strong year in 2022, as consumers took the vacations they had been planning following the pandemic. But now investors are turning cautious toward the year-end as recession fears loom over the economy – which explains the decline in the stock price. However, we believe the company’s Q3 2022 earnings report showed solid demand tailwinds and the near-term headwinds should likely ease in 2023. Still, the inflation path and the federal reserve’s interest rate hikes will decide the course of the current macroeconomic environment.
In Q3, BKNG’s revenue was up 29% year-over-year (y-o-y) to $6.1 billion, which beat estimates of $5.9 billion. In addition, its adjusted earnings per share rose 41% y-o-y to $53.03, ahead of analyst expectations at $49.90. The third quarter is the seasonally strongest for the company, and it tends to make an outsize portion of its annual profits during the peak summer months. The company’s gross travel bookings also increased 36% y-o-y to $32.1 billion, as the company continues to make a robust recovery from the pandemic. Going forward, the company mentioned on the Q3 earnings call that it expects 10% hotel room night growth in the fourth quarter compared to Q4 2019, which is steady with its growth rate in Q3. It also called for an adjusted EBITDA of $1.1 billion in the fourth quarter, noting that it would be a record adjusting for currency headwinds.
Now, is BKNG stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last ten years, there is a 67% chance of a rise in BKNG stock over the next month (twenty-one trading days). See our analysis of BKNG’s Stock Chance Of Rise for more details.
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Calculation of ‘Event Probability’ and ‘Chance of rising’ using the last ten years data
[1] Returns of -4% or lower over the five-day period on 342 occasions out of 2518 (14%); Stock rose in the next five days in 195 of these 342 instances (57%)
[2] Returns of -7% or lower over the ten-day period on 237 occasions out of 2518 (9%); Stock rose in the next ten days in 150 of these 237 instances (63%)
[3] Returns of -3.7% or lower over the twenty-one-day period on 609 occasions out of 2517 (24%); Stock rose in the next twenty-one days in 411 of these 609 instances (67%)
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, BKNG has fallen 19% 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 | Dec 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| BKNG Return | -7% | -19% | 32% |
| S&P 500 Return | -6% | -19% | 72% |
| Trefis Multi-Strategy Portfolio | -5% | -22% | 215% |
[1] Month-to-date and year-to-date as of 12/19/2022
[2] Cumulative total returns since the end of 2016
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