Booking Holdings Is Playing Catch-Up In Online Travel Growth Areas, Analyst Says In Downgrade

Booking Holdings Inc. (NASDAQ: BKNG) was hit with a downgrade Friday, as one sell-side analyst said the company is playing from behind in some of the online travel space's key growth areas. 

The Analyst 

Benchmark analyst Daniel Kurnos downgraded Booking Holdings from Buy to Hold. 

The Thesis

Booking Holdings remains the leader in the traditional hotel booking space, but could be missing out on incremental growth opportunities, Kurnos said in the downgrade note. 

“We acknowledge that the company remains the leader in the traditional hotel space, and that trends in the underlying online travel market remain generally favorable," the analyst said. "However, packages, activities and alternative lodging have even more rapidly become the incremental growth engine in the space, and in those areas, we find Booking Holdings continuing to play catch-up in an increasingly competitive environment." 

Benchmark projects 10-percent upside to consensus estimates and the current share price, but said Booking Holdings could experience decelerating room night and booking growth could persist, adding additional pressure to the company’s premium valuation.

“We still see the brand equity and share repurchase activity as limiting downside risk, but view the risk-reward profile as relatively balanced at these levels,” Kurnos said. 

Price Action

Booking Holdings shares were down 0.93 percent at $2,102.85 at the close Friday. 

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