Gordon Haskett Raises Booking Holdings to Buy, Dismissing AI Threats Ahead of Earnings

Gordon Haskett Research Advisors decided to give Booking Holdings (NASDAQ: BKNG) a nod of confidence, upgrading it from hold to buy. Analyst Robert Mollins believes the market has gotten too spooked by AI's potential to disrupt the online travel giant, overshadowing Booking's solid fundamentals.

Over the last year, BKNG shares have stumbled about 14%, with an even steeper 21% slip so far this year-signs investors have serious concerns. Mollins calls these concerns "overreactions" especially given the hefty barriers that protect Booking's turf, including the expensive and risky process of towing an AI platform into the travel booking arena.

According to Mollins, Booking Holdings boasts what he terms a "defensive moat"-a solid grip on its business that AI entrants are unlikely to breach easily. High startup costs, legal hurdles, and entrenched market positions provide this cushion, which Mollins argues has been overlooked amid the buzz around AI rivals.

Looking ahead to BKNG's upcoming fourth-quarter earnings release on February 18, the analyst expects the company to beat consensus estimates for room nights booked, signaling stronger-than-anticipated demand. If that pans out, it should trigger positive effects across revenue, EBITDA, and earnings per share metrics.

Mollins also flags the ongoing weakness in the U.S. dollar as a tailwind, potentially boosting earnings through favorable foreign exchange movements. This dynamic adds a modest upside kicker to the company's financial picture, which could be key in the near term.

Despite the recent share price drop, Mollins sets a price target of $5,440, implying roughly 28% upside from current levels. He highlights that Booking Holdings is trading below its recent valuation multiples, even while delivering notably stronger margins compared to peers within the travel and tech sectors.

This upgrade underscores Booking Holdings as Gordon Haskett's "highest conviction idea." The thesis here is clear: the AI buzz might be making investors overlook one of the online travel industry's best-positioned players just ahead of a critical earnings report.

It's a reminder that market fears can sometimes run ahead of fundamentals, especially when a hyped theme like AI dominates headlines. How BKNG performs post-earnings will offer a clearer reading on whether those fears were warranted or just noise.