KeyBanc bullish on Booking as AI and scale to drive growth

Investing.com --KeyBanc started coverage of Booking Holdings with an Overweight rating and a $6450 price target on company’s global scale, and industry leading margins. It started Expedia and Airbnb, maintaining a Sector Weight view on both.

Analysts said online travel agents should maintain high single-digit growth as more bookings shift online, alternative accommodations expand, and bundling of travel services deepens customer engagement.

They also pointed to artificial intelligence as a potential driver of better recommendations and higher conversion rates.

For Booking, KeyBanc expects continued share gains and margin expansion through cost efficiencies and increased direct traffic.

The brokerage highlighted Booking’s “Connected Trip” strategy where travelers book multiple travel products in one place and its growing alternative accommodations business, now about a third of room nights.

The company’s Transformation Program, expected to deliver up to $450 million in annual cost savings, and a large buyback program were cited as key supports to profitability and shareholder returns.

Expedia was rated Sector Weight, with analysts noting a more challenging consumer business weighed by U.S. travel softness, platform migration issues, and a slow rollout of its One Key loyalty program.

However, KeyBanc said its B2B segment remains a bright spot, with steady double-digit growth and strong international exposure. Margin gains have been supported by AI-led efficiencies and improved marketing, though rising partner commissions could cap further expansion.

Airbnb remains rated Sector Weight following a transfer of coverage, with KeyBanc seeing its growth moderating amid normalization in alternative accommodation demand.

KeyBanc expects global travel demand to grow roughly in line with global GDP, but believes online travel platforms will continue to outpace the broader industry.

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