BKNG: AI Partnerships And Travel Demand Will Support Future Margin Resilience

Analysts have inched their fair value estimate for Booking Holdings higher to US$6,226.70 from US$6,212.92, pointing to slightly stronger long term revenue growth and profit margin assumptions, a modestly lower discount rate, and a small adjustment to future P/E expectations in light of recent price target increases across the Street.

Analyst Commentary

Recent Street research on Booking Holdings clusters around a constructive travel backdrop, AI related risks, and where the stock sits versus long term expectations. Price targets have been adjusted both higher and lower, which gives you a useful spread of views on growth, execution, and valuation.

Bullish Takeaways

Bullish analysts lifting price targets into the US$5,800 to US$6,400 range point to a solid travel demand backdrop, especially in Europe, and see Booking's global scale and diversification as a key support for long term growth assumptions.
Several research notes highlight Q3 results as strong or quality, with Q4 guidance described as healthy and broadly aligned with market expectations, which they see as reinforcing confidence in management's ability to execute on current plans.
Bullish analysts view Booking as well positioned in the AI transition, citing its global reach, differentiated supply, and marketing efficiency as reasons it could be relatively insulated from disintermediation risk compared with smaller peers.
Some commentary points to ongoing cost optimization and a Transformation Program that is expected to drive efficiencies, with the potential for management to reinvest savings to support Booking's longer term targets and justify higher P/E assumptions.

Bearish Takeaways

Bearish analysts, including those trimming price targets toward the US$5,400 level, keep more neutral or market perform stances and flag that AI remains a central question for online travel agencies, with the potential to affect how value is shared across the travel ecosystem.
Some research cites lingering macro concerns and uses more cautious language around the broader internet group, which can limit how aggressive they are willing to be on Booking's valuation despite a constructive sector narrative.
Commentary around recent volatility, including online travel stock selloffs after new AI travel tools were announced by large platforms, shows that investor sentiment can swing quickly when the AI debate resurfaces, which bearish analysts treat as an ongoing risk factor.
A few firms retain Neutral ratings even as they adjust price targets higher, framing current valuation as closer to the middle of their ranges and suggesting that, in their view, upside from here rests on continued execution and clearer evidence around AI and long term returns on capital.

What's in the News

Truist raised its price target on Booking Holdings to US$5,810 from US$5,750 after what it described as a "quality" Q3 earnings beat, citing reassurance on travel trends into Q4, positioning around AI, and potential upside from Transformation Program savings (periodical).
Booking.com expanded its direct connection with corporate travel platform Navan. The update adds more global lodging inventory, access to various discounted rate types, and a smoother payment process for business travel bookings through an enhanced API integration (Key Developments).
viagogo announced a new partnership with Booking.com that allows fans buying event tickets to add hotels, flights, rental cars, and local attractions, aiming to make concert and event trips more of a full travel package (Key Developments).
Booking Holdings reported that from July 1, 2025 to September 30, 2025 it repurchased 118,516 shares for US$663 million under the buyback announced on February 23, 2023, bringing total repurchases under that program to 4,487,562 shares for US$16.062b (Key Developments).
The company issued financial guidance indicating that for Q4 2025 it expects revenue growth to be 10% to 12% lower than the increase in gross bookings due to a higher mix of flight bookings, and for full year 2025 it expects revenue to be up about 12% on a reported basis (Key Developments).

Valuation Changes

The fair value estimate has risen slightly to US$6,226.70 from US$6,212.92, reflecting modest tweaks to underlying assumptions.
The discount rate has edged lower to 8.53% from 8.61%, implying a slightly lower required return in the model.
The revenue growth assumption is now 8.79% compared with 8.72% previously, a small upward adjustment.
The net profit margin assumption has moved to 30.05% from 29.77%, indicating a marginally higher long term profitability view.
The future P/E multiple has been trimmed slightly to 23.71x from 23.97x, suggesting a modestly more conservative valuation multiple.

Incorporating AI and expanding accommodation options could improve customer retention and drive future revenue growth.
Strategic partnerships and diversification across travel verticals enhance integrated travel experiences and support revenue and earnings growth.
Geopolitical and economic uncertainties may disrupt consumer travel demand, impacting revenue, with region-specific challenges and rising acquisition costs pressuring margins and profitability.

Catalysts

About Booking Holdings

Provides online and traditional travel and restaurant reservations and related services in the United States, the Netherlands, and internationally.What are the underlying business or industry changes driving this perspective?

Booking Holdings is incorporating AI technology across its platforms to improve operations, streamline traveler experiences, and enhance supplier partnerships, which is expected to drive future revenue growth and margin improvement.
The company's focus on increasing alternative accommodations and expanding its Genius loyalty program aims to strengthen customer retention and capture a broader market, potentially boosting revenue and net margins.
Initiatives like the Connected Trip vision and strategic partnerships (e.g., with Uber and AI organizations) are designed to offer enhanced, integrated travel experiences, likely leading to increased customer engagement and higher earnings growth.
Booking Holdings is seeing strong growth in its other travel verticals such as flights (45% growth) and attractions (92% growth), which provide new revenue streams and opportunities for cross-selling, positively impacting overall revenue and earnings.
The company’s global diversification and disciplined management of expenses, combined with stable leisure travel demand, position it well to navigate potential macroeconomic uncertainties, supporting both revenue stability and margin expansion.

Booking Holdings Earnings and Revenue Growth

Booking Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Booking Holdings's revenue will grow by 9.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 19.2% today to 29.2% in 3 years time.
Analysts expect earnings to reach $9.5 billion (and earnings per share of $315.01) by about September 2028, up from $4.8 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $8.3 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.8x on those 2028 earnings, down from 37.5x today. This future PE is greater than the current PE for the US Hospitality industry at 23.9x.
Analysts expect the number of shares outstanding to decline by 2.08% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.66%, as per the Simply Wall St company report.

Booking Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Geopolitical and macroeconomic uncertainties create concerns about consumer travel demand, potentially impacting revenue and earnings.
Moderation in travel trends to the U.S., notably from Canada and Europe, suggests region-specific challenges that could pressure U.S.-focused revenue streams.
Evidence of U.S. consumers becoming more cautious with spending and shifts towards lower-cost accommodations could squeeze margins and affect profitability.
Potential shifts in travel patterns due to macroeconomic uncertainty might lead to volatile demand in specific regions, impacting overall revenue predictability.
Successful experimentation in marketing may result in lower average ROIs, indicating increasing acquisition costs that could pressure marketing efficiency and net margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $6100.361 for Booking Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $7218.0, and the most bearish reporting a price target of just $5200.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $32.4 billion, earnings will come to $9.5 billion, and it would be trading on a PE ratio of 24.8x, assuming you use a discount rate of 8.7%.
Given the current share price of $5571.83, the analyst price target of $6100.36 is 8.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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