Booking Holdings Stock Surges on Strong Q4, Dividend Hike, $20B Buyback Plan

Booking Holdings Inc. (BKNG) shares rose on Friday morning following the company's fourth-quarter earnings report, which topped analyst estimates. The online travel agency reported revenue of $5.47 billion, adjusted earnings of $41.55 per share, and gross bookings of $37.2 billion, all of which exceeded expectations. The company also announced a 10% increase in its quarterly cash dividend and a new $20 billion stock buyback program.

The strong performance in the fourth quarter was driven by a 14% year-over-year increase in revenue, a 17% increase in gross bookings, and a 13% increase in room nights. The company's adjusted earnings per share grew by 30% compared to the same period last year. Booking Holdings' CEO, Glenn Fogel, attributed the growth to the company's disciplined approach to managing expenses and its ability to take advantage of new technologies, such as generative AI.



The company's board of directors also approved a 10% increase in the quarterly cash dividend to $9.60 per share, up from $8.75 a year ago. Additionally, the board authorized a new $20 billion stock buyback program, in addition to the $7.7 billion remaining from the previous program. Booking Holdings expects revenue to grow by 2% to 4% year-over-year in the first quarter and gross bookings to increase by 5% to 7%. The company also expects adjusted EPS to grow in the low double-digit percent range for the full year.

Analysts from Jefferies and JPMorgan both raised their price targets for Booking Holdings stock following the report, to $5,400 and $5,750, respectively. They noted that the company's executives indicated that travel demand remained strong in the quarter and that the company plans to increase its social media advertising spend this year, primarily on Meta Platforms (META) products like Facebook and Instagram.

Booking Holdings' strong fourth-quarter results and positive outlook for the future have led to an increase in investor confidence in the company's stock. The company's ability to capitalize on the recovery in the travel industry, leverage technology to enhance customer experience and operational efficiency, and return value to shareholders through dividends and stock buybacks has positioned it well for continued success in the travel and leisure sector.