Booking Holdings Inc (NASDAQ: BKNG) is likely to be among the companies that take a hit from the coronavirus epidemic as people limit travel, leading Argus to downgrade the stock until the environment returns to normal.
Booking Holdings, which provides online airline, car rental, cruise, hotel and other booking services, noted in its otherwise solid fourth-quarter earnings release that it expects first-quarter room nights to drop as much as 13% from the prior year.
The company has already started to see an impact, with room nights dropping in February after the virus began spreading in Italy.
The Booking Holdings Analyst
Argus analyst John Staszak downgraded Booking Holdings from Buy to Hold with a target price of $2,200.
The Booking Holdings Takeaway
Staszak acknowledged Booking Holdings' strong fourth quarter, and said that while he expects the coronavirus impact to weigh on revenue and earnings, he expects it to be a temporary problem. (See the analyst's track record here.)
The question: how bad and how temporary is the problem?
The discussion of the impact so far suggests room nights could drop as much as 20% in March and the epidemic could extend past the second quarter, Staszak said.
In addition to recommending a Hold, the analyst lowered 2020 EPS estimates from $117 to $110.
Travel demand should recover by next year, he said.
"Our long-term rating remains BUY, as we expect the company to benefit from continued investments in marketing and advertising and to maintain its position as a top online travel agency."
BKNG Price Action
The stock was down 2.15% at $1,612.09 at the close Friday.
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Latest Ratings for BKNG
|Mar 2020||Argus Research||Downgrades||Buy||Hold|
|Mar 2020||Citigroup||Initiates Coverage On||Buy|
|Feb 2020||Morgan Stanley||Maintains||Equal-Weight|
View More Analyst Ratings for BKNG
View the Latest Analyst Ratings
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