TD Cowen has cut its price target on Booking Holdings stock (NASDAQ:BKNG) to $6,000 from $6,850 but maintained a Buy rating on the shares. The company’s stock was trading at $3,920 and has fallen 20.27% year-to-date, hovering near its 52-week low. InvestingPro data cited in coverage indicates the shares appear undervalued on a Fair Value basis, and the relative strength index suggests the stock is in oversold territory.
The broker pointed to Booking’s fourth-quarter operating report as a key input to its revised outlook. Booking posted room nights growth of 9% in the quarter, driven by gains in the United States and long-distance destinations. Operating margins expanded by 80 basis points, although TD Cowen noted higher advertising costs partially offset some of the leverage achieved across the business. InvestingPro data shows Booking retaining robust gross profit margins of 87.36%.
Looking at margin trends, Booking saw an improvement of 190 basis points in 2025, which included a 30 basis point benefit from advertising cost efficiencies. Management has signaled a step-up in reinvestment, accelerating to $700 million in 2026. That level of reinvestment is expected to translate to a $300 million net EBITDA impact in 2026, versus $170 million in 2025 which had a $100 million net EBITDA impact.
Management said the accelerated spending will be directed toward investments in artificial intelligence along with other strategic initiatives. For 2026, the company guided for 9% growth in both gross bookings value and revenue, excluding foreign exchange effects, and forecast margins to expand by 50 basis points.
TD Cowen set its revised price objective using a 19 times estimated 2027 price-to-earnings multiple, reflecting a more conservative multiple given current sentiment around the company’s AI investments. The change in multiple - and consequent lower target - reflects the firm’s recalibration of how the market may value near-term reinvestment into AI and related programs.
Other recent analyst activity underscores a range of views on Booking’s outlook. The company’s fourth-quarter results outperformed consensus: adjusted earnings per share came in at $48.80, beating estimates by $0.61, and revenue reached $6.35 billion versus a consensus of $6.12 billion. Room nights rose 9% year-over-year, and gross bookings climbed 16% year-over-year to $43 billion.
BMO Capital reacted to the quarter by raising its price target to $6,200, citing stronger-than-expected bookings and adjusted EBITDA, which exceeded expectations by 3% and 4% respectively. By contrast, Piper Sandler trimmed its target to $5,000, citing concerns about potential disruption from artificial intelligence to long-term growth. Cantor Fitzgerald also reduced its target, to $4,495, despite acknowledging that the fourth-quarter performance beat prior estimates. Citizens kept a Market Perform rating, pointing to Booking’s exposure to independent and boutique hotels as a potential buffer against AI-driven disruption.
Collectively, these analyst moves reflect a mix of optimism about near-term performance and caution around the implications of stepped-up investment in AI and other initiatives. The divergence of price targets and rationale among analysts highlights differing views on how reinvestment will affect long-term profitability and valuation.