Morgan Stanley moved Booking Holdings up a notch in its ratings on Tuesday, changing its view from equal-weight to overweight while setting a new price objective of $5,500, reduced from $6,150.
In the firm’s note, analyst Brian Nowak said he expects Booking to remain "staying a key driver of travel even as agentic tools evolve," pointing to the company’s capacity to "own the customer, capture robust traveler data and use those to drive high margin direct business."
The bank signaled that it still sees online travel agencies, including Booking, as central elements of the sector’s long-term structure despite the rise of generative AI and other agentic technologies. Morgan Stanley emphasized that agents rely on Booking’s inventory, stating that "agents also need BKNG's leading inventory, giving BKNG leverage."
Explaining the rationale for the upgrade, Nowak wrote: "We think BKNG and the OTAs are set to be just as important in the agentic world as they have been the past two decades." The analyst pointed to current behaviour from early agentic travel products, which he said are "simply diverting traffic to the OTAs‘ apps/websites for purchase, rather than direct in-agent checkout," and noted that some channels "do not want to be the merchant of record."
Morgan Stanley further described the likely industry dynamic as resembling paid search: OTAs would bid to win traffic and transactions and then attempt to convert that traffic into future direct customers. Against that backdrop, the bank highlighted Booking’s multi-decade execution record, pointing to the company’s "20+ year history of leading execution" and saying it expects "more of the same going forward."
Contextual note: The update combines a rating upgrade with a reduced price target. The upgrade reflects Morgan Stanley’s view of Booking’s competitive advantages in customer data, inventory and conversion, and its expectation that OTAs will remain central in a travel market adapting to agentic technologies.