(Reuters) - Shares of Booking Holdings (NASDAQ:BKNG) fell 8% in early morning trading on Friday, after the online travel agency forecast slower first quarter and full-year growth in bookings as U.S. travel demand normalizes from a post-pandemic boom.
Booking is set to lose roughly $11 billion in market value if losses hold, though Wall Street's reaction to its fourth-quarter results was mixed, with some noting the company's 2024 outlook of slightly higher than 7% growth was conservative.
The company's gross travel bookings grew 24% in 2023, a year when travel demand held firm despite high inflation amid a shift in consumers' spending to services from goods, a phenomenon that sent shares of the sector's firms zooming.
But 2024 forecasts by travel companies and hotel operators including Hilton and Marriott over the last few days have signaled demand is expected to grow more slowly this year, disappointing investors.
"After two plus years of strong stock performance, the room nights booked deceleration could drive a bit of a pause in the shares," RBC Capital Markets analyst Brad Erickson wrote in a note after Booking's results.
Erickson, however, bumped his price target on the stock to $3,900 from $3,550, citing confidence Booking would return to "faster-than-market growth".
Booking's shares had risen about 61% in the last one year, giving it a forward 12-month price-earnings ratio of 20.8, compared with peer Expedia (NASDAQ:EXPE)'s 10.7.
"We believe a travel normalization was largely expected for 2024, but given the recent stock move and elevated expectations into earnings, the deceleration (in bookings) is steeper than expected," said Doug Anmuth, analyst at J.P. Morgan.
Booking on Thursday also forecast first-quarter gross bookings growth to be between 5% and 7%, much slower than the 44% rise it reported a year earlier.
Booking shares were trading at $3,586 on Friday. Expedia and Airbnb fell 1% each.