The European Commission — the politically independent executive arm of the European Union — has just decided to block a $1.7 billion acquisition of ETraveli by Booking Holdings. But the Booking.com parent plans to appeal the decision.
As the online travel giant battles the EU, BKNG stock continues to work on an early stage flat base in a turbulent market. The stock has landed on IBD Leaderboard, as well as booking a spot on the Stock Spotlight screen, retaking a key benchmark along the way.
Headquartered in Sweden, ETraveli is a global technology provider focused on offering the best possible flight content to consumers. Along with its own brands like Mytrip, ETraveli has partnerships with Google Flights from Alphabet and Skyscanner, as well as Booking-owned properties Booking.com and Kayak. It has roughly 2,300 employees with offices in Sweden, Greece, Canada, India and Uruguay.
The European Commission blocked the deal, fearing the acquisition would make Booking too dominant in Europe. In a news release in response to the decision, Booking Holding said it "strongly believes the Commission is wrong on both the facts of the case and the law applicable to this transaction, which was cleared unconditionally by multiple competition authorities."
The travel industry powerhouse, which operates brands including Booking.com, Kayak, Agoda, Rentalcars.com and OpenTable, views the ETraveli acquisition as a "pro-competitive transaction." It argues the move would have "combined two separate but complementary Europe-based businesses operating within separate, highly competitive industries," resulting in more options and competitive pricing.
Booking.com Navigates Post-Covid Travel Revival
As the travel industry rebounded from the pandemic-driven global lockdowns, Booking saw a sharp resurgence in sales and earnings.
Albeit based on prior-year quarters that showed a loss, the company posted triple-digit (or even higher) earnings to close out 2021 and kick off 2022. Although EPS gains have slowed recently, they remain quite strong. After posting 197% EPS growth to $11.60 per share in Q1, the Booking.com parent generated a 97% year-over-year increase in Q2 to $37.62 a share.
Over the last four quarters, revenue gains have ranged from 27% to 40%.
That performance has Booking Holdings sporting a 98 Composite Rating, tying fellow travel-booking peers Airbnb and MakeMyTrip. The group ranks a solid No. 36 out of the 197 groups IBD tracks.
BKNG Stock Retakes 50-Day, Nears Buy Point
As Airbnb stock gets a handle on its base and MakeMyTrip refuses to cancel its recent breakout, Booking.com and its fellow brands lift BKNG stock back above its 50-day moving average to kick off the new week.
That has Booking Holdings trading 5% shy of a 3,251.71 buy point. The relative strength line has held up well during the market correction. The RS line remains just below a fresh 52-week high.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
