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Why Shares of Booking Holdings Moved Higher on Tuesday

Lou Whiteman, The Motley Fool

What happened

Shares of Booking Holdings (NASDAQ: BKNG) climbed 5.85% on Tuesday, after an investment bank listed the online travel giant as one of 12 stocks likely to outperform the rest of the market in the face of mounting U.S. trade wars.

So what

Booking shares have had a lackluster year so far, trading down about 4.5% since Jan. 1 heading into Tuesday's trading. The company in February gave a grim outlook for 2019, saying the current year would be heavy on investment as Booking plots its long-term growth outlook.

A busy airport scene showing luggage carts, delivery trucks, and planes parked and taking off.

Image source: Getty Images.

Goldman Sachs in a research report out Tuesday said that a group of twelve stocks that are popular with both hedge funds and mutual funds rea likely to hold up well even in an environment full of economic uncertainty and the threat of trade wars with China and Mexico. Booking Holidngs is one of the stocks on the Goldman list.

"Despite posing a tactical risk, concentrated ownership has generally been a positive signal for subsequent stock returns," the bank said.

Booking also got a leg-up from Guggenheim analyst Jake Fuller, who said that after months of declines, his checks indicate that Booking's listing count has been trending higher. Fuller, who has a neutral rating on the shares, said that the check gives him reason to hope that Booking's outlook from earlier in the year will end up being conservative.

Now what

Booking's management does have a history of talking down expectations, so there is some reason to hope the company will do better than projected. This is a long-term strong growth story, and investors have grown worried that the law of large numbers is beginning to catch up with Booking and its growth will begin to slow.

Analysts on Tuesday gave at least some reason to hope the conventional wisdom on the company will turn out to be too conservative.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Booking Holdings. The Motley Fool has a disclosure policy.