Investment Insights - Booking Holdings Inc. (BKNG)

START - $5 275.70 | FINISH - $6 279.90 

1. HORIZON: 0 - 6 months (Medium-Term) 

2. FROM: 11 December 2025 | UNTIL: 11 June 2026

3. MANAGEMENT ASSESSMENT: 19% growth

4. RECOMMENDATION: BUY

5. PROJECTION BASED ON: R25 000

TRADING PLAN 

●      Potential entry: Entry can be initiated once the share price closes above $5 275.70.

●      Risk management: The stop-loss level is around $4 744, an area that represents a roughly 10.10% drop from the entry price.

●      Profit target: A take profit may be initiated at $6 279, which aligns with a 19% move up from current levels.

WHY THESE SHARES HAVE POTENTIAL FOR PROFIT 

●      Strong financial momentum and profitability

The company reported a record-breaking Q3 2025, with revenue reaching $9.01 billion, up 12.7% year-over-year (YoY) and earnings per share (EPS) of $99.50, up 18.6% YoY, both beating analyst expectations. This performance was driven by 323 million room nights booked, up 8.2% YoY and demonstrates the company’s ability to generate profits from the ongoing strength in global travel. Its asset-lite business model, where it doesn’t own the properties, allows it to maintain high margins and convert revenue into profit efficiently.

●      Strategic growth initiatives gaining traction 

Booking’s future growth is not just reliant on the travel market but also on its strategic initiatives, which are showing reliable results:

○      The connected trip vision: This strategy aims to create a seamless travel experience by bundling flights, accommodations, car rentals and attractions. In Q3 2025, these connected trip transactions grew over 20% YoY, indicating strong customer adoption and the creation of a powerful ecosystem that encourages repetitive business.

○      Dominance in alternative accommodations: With over 8.6 million listings, up 10% YoY, BKNG is a major competitor to Airbnb. This segment saw overnight growth, proving its ability to capture demand across all types of travel, from hotels to vacation homes.

○      AI-powered enhancements: The company is increasingly using AI to personalise the user experience, which helps drive direct bookings and strengthens its loyalty programme. This reduces reliance on expensive advertising channels and improves margins.

TECHNICAL INDICATORS 

The technical setup for BKNG suggests that the stock is at a critical inflection point, with indicators pointing toward a potential resumption of its upward trend following a period of consolidation. 

●      Successful test of channel support

The stock price has tested the lower trend line of its parallel channel, a key technical support level. This test represents a potential buying opportunity, as parallel channels often act as reliable boundaries for price action. A successful hold at this level, around $4 790, would suggest that buyers are stepping in at what they perceive to be an attractive entry point.

●      Breakout above key resistance 

The stock has closed above the resistance level in the $5 193 region. This is a significant development, as a break above resistance often signals that the previous ceiling has now become a new floor, indicating a shift in market sentiment. Additionally, the price is trading well above its 200-day simple moving average (SMA), which confirms that the long-term bullish trend remains intact and that the bulls are still in control of the primary direction.

●      Increasing volume confirms strength 

There has been a noticeable uptick in volume accompanying the recent price action. Rising volume on an upward move is a bullish confirmation signal, as it indicates that the price increase is supported by genuine buying interest rather than being a low-conviction move. This suggests that institutional and retail investors are actively accumulating at these levels.

RISKS 

●      Economic sensitivity and risk of a downturn 

Travel is a discretionary expense, meaning it is one of the first things consumers cut back on during tough economic times. With S&P Global economists estimating a 30% probability of a U.S. recession in the next 12 months and sluggish economic growth, any significant downturn would directly impact Booking’s revenue and profitability as travel demand fades. The company’s performance is highly correlated with the health of the global economy, making it vulnerable to macroeconomic challenges.

●      Pressure on profit margins 

Booking’s profitability is facing pressure from two sides. First, a growing mix of lower-margin products, like flights, is diluting overall profitability. In Q3 2025, the company’s revenue as a percentage of its gross bookings declined, partly due to this shift. Second, to fend off competition, the company may need to increase its marketing and promotional spending, which would further squeeze its margins. 

●      High valuation and execution risk 

Booking trades at a premium valuation, with a forward P/E ratio of around 33x. This high valuation is based on the expectation of continued strong growth and the successful execution of its strategic initiatives, such as the connected trip. This leaves little room for error. Any stumbles in execution, failure to meet growth expectations or inability to fend off competition could lead to a significant correction in the stock price, as investors are paying for a high level of performance. 

SOURCES

●      Booking Holdings: Solid Growth, Good Valuation

●      PDF- BKNG Q3 Earnings Report

●      Booking Holdings beats results estimates on steady travel demand, shares up 

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** This article was prepared by BROKSTOCK analyst Maboko Seabi