Key points:
- Booking Holdings reported earnings after the close Wednesday
- The company topped analyst expectations
- BKNG shares are up over 5%
Booking Holdings (NASDAQ: BKNG) shares are up over 5% in premarket trading after the company reported third-quarter earnings after the close on Wednesday, topping earnings and revenue estimates, as well as providing positive comments on its outlook.
The online travel agency firm posted adjusted earnings per share of $53.03 on revenue of $6.1 billion, topping analyst expectations of earnings per share of $49.85 on revenue of $5.92 billion. Earnings rose 41% year-over-year.
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“I am encouraged by the strong results we are reporting today, including the highest amount of quarterly revenue and Adjusted EBITDA ever for our company. We saw an improvement in room night trends as we moved through the quarter and accommodation ADR growth continued to be strong,” said Glenn Fogel, Chief Executive Officer of Booking Holdings.
He added that despite rising concerns around the macroeconomic environment, the company is encouraged by the slight improvement in room night growth in October and by the level of bookings for travel in early 2023, echoing the recent sentiment around travel from other related stocks such as airlines.
Following the news, Barclays analyst Mario Lu raised the firm's price target on Booking Holdings to $2,370 from $2,270, maintaining an Overweight rating. The analyst explained that the company's third-quarter bookings and revenue came in 5% and 2% above Street estimates, respectively, while room nights improved to 10% versus 2019 in August and September, with further improvements to 12% in October.
Meanwhile, Mizuho analyst James Lee cut the firm's price target on Booking to $2,170 from $2,300, keeping a Buy rating on the stock. Lee stated in a research note that travel demand was strong as room night growth was ahead of the quarter by two points, and October is tracking ahead by seven points. In addition, the analyst favors the long-term fundamentals of Booking “given its dominance in Europe and the potential expansion in the US.”