Booking Holdings Inc. (NASDAQ: BKNG) has confirmed that it will release its fiscal Q4 2021 earnings report on February 23, 2022, after market close.
What to look for: When the company reports its results, it is expected that uncertainties related to the pandemic are likely to have affected earnings. Equally, travel market disruptions due to the Omicron variant are expected to reflect Q4 results. However, there is growing optimism regarding the travel markets due to the current vaccination drive globally, which will have acted as a tailwind in the fourth quarter. In addition, the relaxation of travel restrictions in most parts of the world will be another positive for Booking Holdings. Also, rising air ticket bookings and growing international and domestic boings momentum will drive revenues.
Earnings: Stockearning’s Estimated EPS for the fourth quarter is expected to be $12.73 per share compared to a year ago when the company reported a loss of $0.57 per share. In the third quarter, the company produced an earnings surprise of 19.46%, with actual EPS of $37.7. Historical EPS performance shows that the company has, in the past 12 quarters, topped EPS estimates 31 times (88%) and missed four times (11%).
Revenue: In the fourth quarter, the company expects revenue of $2.9 billion, representing a YoY increase of 134.3%. The company had revenue of $4.68 billion in the third quarter beating estimates of $4.16 billion. The top line grew 77% YoY on a reported basis and 76% in a constant currency basis.
Stock movement: BKNG shares have gained 7.4% since the company released its third-quarter earnings. Interestingly, the company’s shares have been UP 30 times out of the past 48 quarters. So, the historical price reaction suggests a 62% probability of the share price going Up following the fiscal Q4 2021 earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-5%, while the predicted volatility on the seventh day is +/-6%.
What analysts are saying: Piper Sandler analyst Thomas Champion slashed his price target on BKNG from $2,750 to $2,470 but kept a Hold rating on the shares. Although the omicron outbreak has "clouded the picture," Champion told investors in a research report that the longer-term track remains one of continuous improvement. According to the expert, travel in the United States in 2022 will be significantly nearer to 2019 levels than it was in 2020 and 2021. He did, however, "tweak lower" his long-term projections for Booking.
Jefferies’ John Colantuoni assumed coverage of BKNG with a Buy rating and a price target of $3,100 as he took over coverage of the Online Travel segment. The analyst who maintains the firm's current ratings indicates that he sees exposure to the burgeoning travel market giving BKNG seven years of more than 15% EPS growth.
RBC Capital analyst Brad Erickson upgraded the stock from Hold to Buy but maintained his price target of $2,700. He believes that the market undervalues the company's substantially superior profitability compared to pre-pandemic levels and cites its limited susceptibility to the "subtle direct booking trend" that the US property manager checks have detected. As a result, the company could witness enhanced market share gain in the United States, according to Erickson.
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