Overview
Goldman Sachs has reduced its price target for Booking Holdings to $5,920.00 from $6,050.00 and maintained a Neutral recommendation on the shares. Booking Holdings, a leading player in the Hotels, Restaurants & Leisure industry, carries a market capitalization of $164.63 billion and is trading at a price-to-earnings ratio of 33.44, reflecting a premium valuation.
Quarterly performance and margin profile
The company delivered a third-quarter performance that exceeded expectations on several operational metrics, including gross bookings, room nights and revenue. Expansion in alternative accommodation supply and a longer booking window were cited as contributors to the upside, with broad-based outperformance across regions and particularly faster growth in the United States.
According to InvestingPro figures cited by management, Booking reported a gross profit margin of 86.99% and generated $26.04 billion in revenue over the last twelve months, with year-over-year revenue growth of 12.96%.
Management commentary and valuation signals
Goldman Sachs summarized management's description of the macro backdrop as stable through the third quarter, with steady travel demand carrying into the start of the fourth quarter despite ongoing geopolitical and macroeconomic uncertainty. Independent Fair Value calculations referenced in InvestingPro indicate that Booking may be slightly undervalued on that basis, and the company earns an overall Financial Health assessment of "GREAT." Additional proprietary insights are noted as available through a paid research report.
Regional and product mix trends
Room night growth varied by region - Europe and the U.S. recorded high single-digit year-over-year increases, while Asia and Rest of World posted low double-digit percentage growth. Management highlighted specific corridors that showed strength, including travel from Canada to Mexico and from Europe to Asia, which helped offset softer demand in certain inbound corridors to the United States.
Product mix dynamics also contributed materially to performance. Alternative accommodation listings grew 10% year-over-year, room nights showed double-digit growth in the aggregate, flight ticket sales increased by 32% and attractions bookings rose 90%. Booking's Connected Trip initiative is gaining traction, with transactions growing in the mid-20% range year-over-year and now representing a low double-digit share of Booking.com’s total transactions.
Partnerships and analyst activity
On the partnerships front, Navan announced an enhanced direct connection to Booking.com designed to expand global lodging inventory available to business travelers. That integration is positioned to deliver additional savings through improved API connectivity, with particular benefit called out for travel to remote destinations covered by Booking.com's inventory.
Analyst activity remains mixed. DA Davidson reiterated a Buy rating and set a price target of $6,600, while BNP Paribas Exane initiated coverage with an Outperform rating, pointing to Booking's industry-leading margin profile and large user base as growth drivers.
Separately, technology and restaurant reservation developments noted in the ecosystem include a partnership between SoundHound AI, Inc. and OpenTable to enable hands-free, in-car voice reservations tied to OpenTable's network of more than 60,000 restaurants globally, and a collaboration between OpenTable and VOICEplug AI to automate phone-based reservations across 20 countries. These items underscore continued innovation in travel and restaurant technology that interfaces with Booking's market.
Summary
Goldman Sachs has cut its Booking Holdings price target to $5,920 while keeping a Neutral stance, after the company posted a third-quarter beat driven by alternative accommodations growth, an expanded booking window and rising U.S. demand. Strong margins and revenue expansion were reported, and the company is advancing product initiatives and partnerships that broaden distribution and transactional mix.
Key points
- Goldman Sachs lowered its price target to $5,920 from $6,050 and maintained a Neutral rating - market cap $164.63 billion, P/E 33.44.
- Q3 results surpassed expectations across gross bookings, room nights and revenue, aided by growth in alternative accommodations and an extended booking window; U.S. growth accelerated.
- Product mix expansion includes double-digit room night growth, 10% increase in alternative listings, 32% rise in flight ticket sales and 90% jump in attractions bookings; Connected Trip transactions are growing mid-20% year-over-year.
Risks and uncertainties
- Ongoing geopolitical and macroeconomic uncertainty could weigh on global travel demand - this impacts the broader travel and hospitality sectors.
- Softer demand in certain inbound corridors to the United States may constrain U.S.-facing revenue growth despite other strong corridors - affecting regional travel volumes and lodging demand.
- Regional variability in room night growth introduces execution risk as performance depends on a mix of strong and weaker markets across Europe, Asia, U.S. and Rest of World.