Booking Holdings is the IBD Stock of the Day, as BKNG stock is showing resilience and forming a bullish cup with handle pattern. Shares for the travel company have gained more than 55% this year as travel demand has surged.
Founded in 1996, Booking Holdings operates in more than 200 countries and completed online bookings for roughly 900 million room nights last year across its brands. Those brands include Booking.com, Priceline, Agoda, Rentalcars.com, Kayak and OpenTable.
On the stock market today, BKNG stock rose 0.49% to close at 3130.80. Shares are forming a handle with a buy point of 3,207.32.
BKNG Stock: Q3 Revenue Up 21%
BKNG stock has gained about 10% since Booking Holdings reported third-quarter earnings after market close Nov. 2. The company reported that demand for travel remained strong throughout the summer months.
"Overall, we continued to see resiliency in global leisure travel demand," Chief Executive Glenn Fogel said on the company's earnings call. "Given current trends, we expect customers and consumers will continue to prioritize travel over other discretionary spend in 2024."
For the three months ending in September, Booking Holdings' revenue climbed 21% year over year to $7.34 billion. That topped analyst expectations of $7.26 billion, according to FactSet.
BKNG stock's adjusted earnings climbed 36% to $72.32 per share, topping analyst consensus of $67.97 a share.
Still, BKNG stock fell slightly following the report, as Booking officials warned that the Israel-Hamas conflict had slowed October bookings. But BKNG stock recovered to close positive in next day trading on Nov. 3.
How Long Will 'Revenge Travel' Last?
BKNG stock has benefited from travel demand that boomed as Covid-19 restrictions were lifted. So-called revenge travel helped power Booking Holdings to triple-digit yearly earnings growth in 2021 and 2022.
Despite persistent concerns about inflation, travel demand has been steady this year as well. BKNG's annual earnings are projected to climb to an adjusted $147 per share for all of 2023, according to FactSet. That would represent 47% growth.
Analysts at Wedbush have BKNG stock on the firm's "Best Ideas List," with a target price of 3,300. But in a client note following Booking Holdings' earnings report, Wedbush analyst Scott Devitt wrote that "investor sentiment on the broader online travel group has become more negative in recent months." That's in part because many fear the recovery for leisure travel has peaked.
Still, Devitt said that the company's expectation of outperforming its pre-Covid growth rates and ongoing stock buyback plans should help power the stock.
A recent Goldman Sachs research report noted that, as the post-pandemic surge fades, online travel companies are focusing "investments around product and customer acquisition to align with this more stable growth environment."
The report said Booking Holdings has focused on offering a "connected trip," that allows travelers to book all parts of a trip in one place. In June, the firm launched a beta version of a trip planning assistant powered by artificial intelligence.
BKNG Stock: Technical Ratings
Meanwhile, BKNG ranks fourth among stocks in IBD's leisure-travel booking group, according to IBD Stock Checkup. BKNG stock has an IBD Composite Rating 96 out of 99. The score combines five separate proprietary ratings into one rating — with the best growth stocks scoring above 90.
Notably, BKNG stock's base is only 16% deep, suggesting resilience for shares with support at the stock's 200-day moving average.
Further, BKNG stock has an IBD Relative Strength Rating of 91 out of 99. The Relative Strength Rating shows how a stock's price performance stacks up against all other stocks over the last 52 weeks. The best growth stocks typically have RS Ratings of at least 80.
