Barclays, a UK multinational investment bank, maintains its overweight rating for Booking Holdings (BKNG), an American travel company that offers various services like online travel agencies, travel fare aggregators, and online hotel reservations. The overweight rating suggests that the stock is likely to perform better than the overall market. Barclays has also set a 12-month price target of $2,600 for BKNG, indicating a potential upside of more than 9%.
According to Barclays analyst Deepak Mathivanan, the travel industry is expected to recover strongly, leading to a positive outlook for companies like Booking Holdings. Furthermore, the analyst expects the company’s alternative accommodations segment to play a key role in this recovery as it is less impacted by the pandemic compared to traditional hotels. This segment includes vacation rentals, apartments, and other non-hotel accommodations that have seen increased demand during the pandemic. It is also one area where Booking Holdings can differentiate itself from other competitors.
Mathivanan also highlighted the company’s efforts in expanding its payment processing capabilities through the development of new payment technologies and partnerships with payment providers. This is expected to reduce the company’s reliance on third-party payment providers and improve its margins, which is a positive development for investors.
Moreover, Barclays believes that the company’s financial position remains strong, with a net cash position of $10 billion as of the end of the third quarter of 2021. This provides the company with the flexibility to invest in growth opportunities, return capital to shareholders through buybacks and dividends, and pursue strategic acquisitions. The company’s dividend yield is currently around 0.4%.
Overall, Barclays maintains a positive outlook on Booking Holdings, citing the company’s strong market position, efforts to expand its payment processing capabilities, and potential for growth in the alternative accommodations segment. However, investors should note that like any investment, BKNG carries risks, including changes in the travel industry, economic downturns, and regulatory developments.