Piper Sandler has cut its price target on Booking Holdings Inc. (NASDAQ:BKNG) to $5,000 from $5,750 but left its rating on the shares at Neutral. The firm said the adjustment reflects a lower assumption for long-term growth tied to potential disruption from artificial intelligence, even as the company posted quarterly results that outperformed guidance.
Booking's shares are trading at $4,269.99, approximately 27% below their 52-week peak of $5,839.41. InvestingPro data included in reports indicates the stock appears slightly undervalued versus a Fair Value assessment.
The broker emphasized that the price-target reduction was driven by concerns about how AI could alter the competitive landscape and revenue trajectory over the long term. That said, Piper Sandler also acknowledged the company's ongoing initiatives: execution across generative AI, loyalty programs, expansion into alternative accommodations, and opportunities in the Asia-Pacific region. The firm modestly raised its near-term estimates while lowering the long-term target price.
Booking's most recent operating results helped frame the debate. For the fourth quarter of fiscal 2025, the company delivered adjusted earnings per share of $48.80, beating analyst expectations by $0.61. Revenue came in at $6.35 billion, above the consensus figure of $6.12 billion. Room nights rose 9% compared with the same quarter in 2024, and gross bookings increased 16% year-over-year to $43 billion. Management reported a reacceleration in U.S. room nights and strength across Asian markets.
Management also provided fiscal 2026 guidance, indicating that top-line revenue is expected to track above the company’s long-term growth algorithm of 8/8/15. Trends in both business-to-consumer and business-to-business segments were described as solid, supporting the company's near-term outlook.
Despite strong recent performance, valuation metrics reflect investor expectations for continued high growth. Booking produced revenue growth of 12.96% over the last twelve months and a five-year revenue compound annual growth rate of 10%. Yet the company's price/earnings-to-growth (PEG) ratio stands at 5.47, signaling a premium valuation relative to its growth rate.
Other brokerage actions after the earnings release illustrate divergent views. BMO Capital lifted its price target to $6,200 from $6,000 and maintained an Outperform rating, citing the strong results. Cantor Fitzgerald cut its target to $4,495 from $5,830, attributing the move in part to AI-related concerns while noting Booking’s actual performance exceeded prior estimates. Citizens Financial upheld a Market Perform rating and highlighted the company’s exposure to independent and boutique hotels as a buffer against AI-driven changes.
The juxtaposition of solid near-term results and longer-term uncertainty around AI-driven disruption has produced varied analyst reactions. Investors and market participants are weighing robust recent fundamentals against a reappraisal of the company’s growth runway and valuation.
Key points
- Piper Sandler lowered its price target on Booking Holdings to $5,000 from $5,750 while keeping a Neutral rating.
- Booking reported Q4 adjusted EPS of $48.80 and revenue of $6.35 billion, both ahead of expectations; room nights rose 9% and gross bookings were $43 billion, up 16% year-over-year.
- Brokers are split: BMO raised its target to $6,200 with an Outperform, Cantor Fitzgerald trimmed its target to $4,495, and Citizens kept Market Perform, reflecting divergent views on AI risk and business resilience.
Risks and uncertainties
- Potential disruption from artificial intelligence could slow Booking’s long-term growth - a risk cited by Piper Sandler and Cantor Fitzgerald.
- Valuation appears elevated relative to recent growth metrics, with a PEG ratio of 5.47 indicating sensitivity to execution and growth shifts.
- Regional performance swings, such as variability in U.S. room-night trends or Asia strength, could affect near-term revenue and bookings momentum.