It’s been a busy year for Booking Holdings shares (NASDAQ:BKNG) values. After Rising more than 40% from its 2022 low On the back of a recovering travel scene, questions linger as to whether the booking giant can continue its recovery momentum into a new year. To be sure, 2023 is likely to be a recession year, the severity of which remains a big question mark on the minds of many market participants.
Travel tends to be sensitive to the health of the broader economy. In a pandemic, local outbreaks and new variants of COVID-19 are also possible things to think about. Without a doubt, the worst of the pandemic seems to be behind us.
That being said, the pandemic is not over yet. With new variants set to dominate the new year (think XBB 1.5 variant), the potential impact on the continued recovery in travel is uncertain. We are all ready to get ahead of the pandemic. However, investors must weigh all the risks before putting money to work.
Booking Holdings stock: high optimism from a 5-star analyst
Right now, investors seem pretty bullish on Booking’s prospects despite recessionary headwinds and the spread of a new variant of COVID-19. Wall Street analysts remain bullish, with one analyst (Ivan Feinseth of Tigress Financial) going so far as to call the name “one of the best ways” to invest in “travel recovery.”
I think Feinseth is right about the money; Booking Holdings stock is one of the best, if not the best, names to take advantage of the return of travel.
As a five-star rated analyst, Feinseth is a man who has made many good decisions. With a $3,210 price target on the street for Booking Holdings stock, I think the recent investor optimism is warranted. Feinseth sees future growth for Booking. In addition, he is also a fan of the company’s “strong balance sheet and cash flow.”
With more than $9 billion in cash and cash equivalentsBooking Holdings has the dry powder to weather a storm and buy back shares while they are relatively undervalued.
As of writing, BKNG shares don’t look too cheap on 36.5 times the final earnings and 5.6 times sales. That being said, Booking is a leading dog in the space with a moat that I see much wider than his peers due to his commanding presence and his network advantage in Europe. Such a moat deserves a premium, and right now, the current price may not be all that absurd, even with the current list of headwinds.
In fact, many optimistic analysts not only believe that Booking can overcome the jitters of the pandemic, but also believe that a mild to moderate recession may be less of a concern as the travel industry continues to find its footing.
Once Booking Holdings is on a stable footing (many think it already is), it may be difficult to topple once the expected headwinds hit.
I share the analysts’ enthusiasm for the name. Booking is one of the best actions in its class. I’m optimistic
Does the travel industry still have legs?
Only time will tell what the recession does to the ongoing recovery in travel. There is likely still quite a bit of pent-up demand after a pandemic plagued in recent years. As China reopens its doors, moving on from draconian zero-COVID policies, I think travel still has legs, as an economic slowdown adds another weight on consumers’ backs (the other being ongoing inflation).
In any case, the long-term prospects look promising for the industry and Booking. A 2023 recession could come and go faster than those of the past (with perhaps the exception of the 2020 recession). All things considered, Booking is a company that is more than capable of grabbing a market share, regardless of where the industry is headed in the short or medium term.
Are BKNG shares a buy, according to analysts?
Going back to Wall Street, BKNG shares are looking like a strong buy. Of the 19 analyst ratings, there are 15 Buys and four Holds. He Booking Holdings average price target is at $2,391.76, implying 3.9% upside potential. Analyst price targets range from a low of $2,050.00 per share to a high of $3,210.00 per share.
The final result of the stock reserve of shares
Booking Holdings shares look hard to sustain ahead of a global recession. Still, the company has a lot to offer as it looks to play to its strengths. Booking can not only shine in hotels, as it seeks to drive growth. Vacation rentals and the like are also an area where the company can effectively leverage its impressive network.
Leave a Reply