Shares of Booking Holdings Inc. (NASDAQ:BKNG) have underperformed the broader market so far this year. As of September 1, the stock was down 6.66% year-to-date, while the S&P 500 Index has rallied 11.65%. Despite this, there are plenty of reasons for optimism.
On August 31, Rosenblatt initiated coverage of Booking Holdings Inc. (NASDAQ:BKNG), giving the stock a Buy rating and setting the price target at $245.
Bull Case
Rosenblatt believes the company remains the best-positioned online travel agency globally. The research firm pointed to Booking Holdings Inc.’s (NASDAQ:BKNG) unmatched scale and diversification, solid liquidity and free cash flow conversion, and a track record of executing across key strategic initiatives.
The firm believes that concerns that AI could disrupt Booking Holdings Inc.’s (NASDAQ:BKNG) business have been overstated and are already reflected to some extent in the stock.
Additionally, Rosenblatt sees the company’s Connected Trip strategy as both a source of growth and a structural AI moat. In the second quarter of 2026, Connected Trip transactions increased at a low-double-digit rate, with flights, payments and alternative supply being added to the company’s core business.
It is worth noting that Booking Holdings Inc. (NASDAQ:BKNG) has an independent and largely fragmented supply base, which is more difficult for AI agents to aggregate than concentrated chain inventory.
The company is also expecting greater savings from its Transformation Program. Booking Holdings Inc. (NASDAQ:BKNG) has raised its expected annual run-rate savings from the program to approximately $650 million and expects to fully realize these savings by the end of 2027. The expected savings should provide the company with more capacity to invest in its strategic priorities.
Bear Case
However, Booking Holdings Inc. (NASDAQ:BKNG) continues to face headwinds, especially as geopolitical uncertainty and inflationary pressures are affecting travel demand.
The company expects gross bookings growth between 4% and 6% in the third quarter, while it expects full-year 2026 growth to be in the high single digits. Booking Holdings Inc. (NASDAQ:BKNG) pointed out that it expects elevated flight ticket prices, reduced flight capacity on certain routes, and softer long-haul international travel demand to continue through the third quarter.
Additionally, the company said it expects some pressure on inbound travel to the Middle East, although travel demand from Middle Eastern customers remains largely normalized.
What the Numbers Say
Hedge fund interest in Booking Holdings Inc. (NASDAQ:BKNG) has also slightly weakened recently. According to Insider Monkey’s database, 92 hedge funds held positions in the stock in the second quarter of 2026, down from 95 funds in the first quarter.
As of August 14, 2.83% of the company’s float was sold short. Booking Holdings Inc. (NASDAQ:BKNG) is currently trading at 19.49 times forward earnings. While the stock may not appear inexpensive, its trailing price-to-earnings ratio stands at 22.50, suggesting that the current valuation may be reasonable. For investors, the key question may be whether Booking Holdings Inc.’s (NASDAQ:BKNG) growth initiatives and cost savings can outweigh the near-term pressures facing global travel.
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