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Booking shares down on soft guidance; Morgan Stanley maintains bullish tone

Published 02/22/2024, 04:13 PM
Updated 02/23/2024, 04:08 AM
©  Reuters Booking (BKNG) beats expectations in FQ4, initiates quarterly dividend; shares drop

Booking Holdings (NASDAQ:BKNG) saw its share price slide over 9% in premarket trading Friday after its EBITDA/bookings guidance missed expectations.

The company reported earnings per share (EPS) of $32 for Q4, surpassing analyst predictions of $29.66. Revenue was reported at $4.8 billion, also above the projected $4.71 billion.

Booking’s gross travel bookings during the quarter totaled $31.7 billion, marking a 16% increase compared to the same period last year.

Apart from its quarterly numbers, Booking also announced a quarterly cash dividend of $8.75 per share, approved by its board.

This dividend is scheduled for payment on March 28, 2024, to shareholders on record as of March 8, 2024.

"We are pleased to report a strong close to 2023 with fourth quarter room nights growing 9% year-over-year or 11% when excluding business associated with Israel, which was significantly impacted by the war,” Booking CEO Glenn Fogel said in a statement.

Looking ahead to FQ1 2024,

For Q1, Booking revenue growth to be between 11% and 13%, and gross bookings to rise between 5% and 7%.

The forecast for adjusted EBITDA ranges from approximately $680 million to $720 million, representing a 19% year-over-year growth and a 1 percentage point rise in EBITDA margin.

Commenting on the report, analysts at Morgan Stanley said the company's bookings/EBITDA guidance was below the broker's prior estimates.

In addition, the analysts also voiced concerns over Booking's flat US room night growth in Q4, which "feeds concerns around share loss in leisure hotels and speaks to needed execution improvement in 2024."

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Still, analysts believe the strength in alternative accommodations and the promise of capital returns will sustain growth and support valuation multiples.

Morgan Stanley reiterated the Equal Weight rating on the stock and raised the price target to $3,700.

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