KeyBanc has a positive outlook on Booking Holdings, expecting growth.

KeyBanc has given Booking Holdings an Overweight rating in its new assessment, highlighting the company's global scale and sector-leading margins, and set a price target of $6450. Additionally, they maintained a Sector Weight outlook for Expedia and Airbnb.

Analysts indicated that online travel agencies will continue to sustain high single-digit growth, driven by the increasing online reservations, the expansion of alternative accommodation options, and the packaging of travel services enhancing customer engagement. They also emphasized the potential of artificial intelligence to provide better recommendations and higher conversion rates.

According to KeyBanc, Booking is expected to continue gaining market share and expanding margins through cost efficiency and increased direct traffic. The research firm highlighted the company’s "Connected Travel" strategy, where travelers book multiple travel products in one place, as well as the growing 30% market share of the company's alternative business model in the accommodation sector. The company’s Transformation Program, expected to generate annual savings of $450 million, and a large share buyback program are identified as key supports for profitability and shareholder returns.

While giving a Sector Weight rating for Expedia, analysts noted that the travel weakness in the U.S., platform transition issues, and the slow rollout of the One Key loyalty program are complicating the consumer business. However, KeyBanc expressed that the B2B segment continues to be a bright spot with stable double-digit growth and strong international presence. While margin increases are supported by AI-driven efficiencies and improved marketing, it was warned that increasing partner commissions could limit further expansion.

Airbnb was rated with Sector Weight following the report, as KeyBanc forecasts that its growth will slow due to the normalization of demand for alternative accommodations. KeyBanc expects global travel demand to grow in line with global Gross Domestic Product (GDP) but believes that online travel platforms will continue to grow faster than the sector.