What happened
Shares of Booking Holdings (BKNG 1.48%) were gaining today, boosted by a price-target increase from Wells Fargo and a generally bullish day on the market.
As of 1:19 p.m. EST, Booking shares were up 7.5%. At the same time, the S&P 500 jumped 1.9%, reversing a sharp drop yesterday.
Image source: Getty Images.
So what
Wells Fargo analyst Brian Fitzgerald raised his price target this morning on several internet stocks, including Pinterest and Snap, and lifted his target from $1,800 to $2,250 on Booking, though he maintained his rating at equal weight.
Fitzgerald noted that internet stocks had outperformed in 2020, and he expects a similar trend this year as stocks like Booking will benefit from improving economic fundamentals due to vaccine distribution, a loosening of quarantine restrictions, and another round of U.S. stimulus.
Like other travel stocks , Booking has been hit hard by the global pandemic, but the stock has recovered its earlier losses and is now up over the past year, indicating that a recovery in the business is already baked into the stock price. Based on Fitzgerald's price target, he sees a 19% upside from yesterday's closing price.
Now what
Booking Holding's fourth-quarter earnings report is due out in February, and it's likely to be another bloodbath. The majority of the company's business comes from Europe, which saw a spike in coronavirus cases during the period as the U.S. experienced a similar rise. Analysts are expecting a modest loss at $3.80 per share for the period and for revenue to plunge 65%. While the company is at the mercy of the pandemic for now, keep an eye on any commentary about parts of the world that have emerged from the crisis, like Australia and East Asia, as pent-up demand in those regions could signal a broader comeback in global travel later in the year.
