Mizuho Securities Reiterates OTA Top Pick as Booking Holdings (BKNG)

Mizuho Securities analyst James Lee reiterated a Buy rating and $2,150.00 price target on Booking Holdings (NASDAQ: BKNG) while maintaining the company as his top pick in the OTA sector. The separation between the winners and losers continues as pointed out by the analyst's recent investor call on Google’s SEO update leading Mizuho to cut the price targets on Expedia (NASDAQ: EXPE) to $100 from $115 and TripAdvisor (NASDAQ: TRIP) to $35 from $40.

The analyst offered 5 key takeaways from the call:

1) Google’s Core Update has negatively impacted OTAs’ organic search traffic in March, July and most recently in September

2) Increased exposure of Google Hotel Ads ("GHA") has caused organic text links to be pushed down by nearly 10%

3) We expect EXPE’s SEO traffic decline to accelerate in 4Q19, and VRBO/HomeAway’s SEO issues appear to be unresolved. As a result, we are lowering our 2021E EBITDA by 6%
to $2.4bn

4) We expect TRIP’s SEO traffic to stabilize and but see negative leading indicators for organic traffic for restaurants and attractions. As a result, we are lowering our 2021E EBITDA by 7% to 477m

5) We expect BKNG’s SEO to be under pressure, but the OTA has a smaller exposure to organic traffic and we believe it can make up traffic loss with paid search

For an analyst ratings summary and ratings history on Booking Holdings click here. For more ratings news on Booking Holdings click here.

Shares of Booking Holdings closed at $1904.03 yesterday.

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