Booking Holdings Inc. (#BookingHolding) is a booking agent for aircraft, cruise ships, car rentals, restaurants and vacation packages. The company is scheduled to report third-quarter results on Wednesday, Nov. 3, after the market close. Zacks is forecasting sales of $4.16 billion, above the $2.64 billion in the prior-year quarter and the highest in the past 7 quarters (with 7 quarterly forecasts lower than the actual reported numbers) while the projected return is $31.56 per share, above the $12.27 in the prior-year quarter after consecutive losses in the previous three quarters.
Booking Holdings is a major travel agency operating through a number of booking and travel websites, including Booking.com, Agoda, OpenTable and Rentalcars.com, and the company has also acquired travel media companies Kayak and Momondo. According to its Q2 report, the company’s flight bookings increased 120% compared to the same quarter a year earlier and bookings rose 59% compared to Q1, mainly driven by vaccination progress and relaxation of travel restrictions in European countries and the US, while bookings in Asia for Q2 were worse than Q1.
For the third quarter, Booking Holdings’ revenue is expected to continue to grow from the second quarter, driven by rising travel trends including the relaxation of additional restrictions in European countries (Western European countries have higher vaccination rates than the United States) and some areas of Asian countries. Jefferies analysts raised their Booking Holdings price target to “Buy”, from $2,800.00 to $2,850.00. However, the rise in cases from the delta variant late in the third quarter could be a drag on the company’s overall revenue.
Although the company’s operating results have declined significantly, compared to the pre-pandemic levels, the company’s share price has continued to rise. This was partly due to the oversupply of liquidity in the market as a result of the central banks’ stimulus measures (100 hedge funds held the company before the end of the second quarter). It is now trading around the Q2 high of $2,480.00, well below the 52-week high of $2,540.00. The first resistance will be $2,540, and the next target will be at the upper channel line, or Fibo 161.8 level at $2,800 (drag from Q1 high to Q2 low). There will be a first support at the MA200 at $2,295 and next support at the quarter’s low zone at $2,060.00.
Although travel restrictions around the globe are relaxing, the number of people infected is still high. For example, Thailand announced it was accepting tourists from 63 countries on November 1, while the number of daily infections in the country is at 7,574 cases (November 2) with 64.28% of the population vaccinated with a first dose and 47.20% having received both doses. If more infections are found after opening the country there is a risk the government may decide to shut the country down again.
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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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