Booking Holdings is “best in class”, this investor says

In an appearance on BNN Bloomberg Market Call on April 8, First Avenue Investment Counsel chief investment officer Brian Madden said Booking Holdings (Booking Holdings Stock Quote, Chart, News, Analysts, Financials NASDAQ:BKNG) was added to the firm’s dividend growers portfolio in March, calling it the best-in-class global online travel agency and a compelling buy after the recent selloff.

Madden said the market is underestimating the durability of Booking’s competitive position as investors worry AI could weaken its moat. He rejected that view, arguing the company remains deeply embedded in the travel ecosystem through its network of travellers, travel providers and its own booking, payments and AI tools.

“The steep sell-off we think is a case of baby thrown out with the bathwater,” he said. “The thesis here, which we think is totally erroneous, is that AI is going to disrupt this company and erode its competitive moat.”

He said Booking’s brands, including Booking, Agoda, Priceline and OpenTable, give it broad exposure across hotels, flights, car rentals, restaurant reservations and private accommodations. In his view, the company’s edge comes from its scale, strong partnerships with traffic sources such as Google and Meta, and its own use of AI to improve the customer experience and control costs.

Madden also pointed to Booking’s financial profile, saying the business generates operating margins north of 40% and returns on invested capital above 50%. He added that the company has been returning capital through an active buyback program and a dividend that has already been increased twice.

He noted the stock recently completed a 25-for-1 split, which changed the optics of the chart but not the underlying thesis.

More importantly, he said Booking has navigated repeated competitive threats over more than two decades and still compounded strongly over time, which is why he sees the current weakness as a buying opportunity rather than a structural warning sign.

Among analysts covering the stock, 31 rate it “Buy,” nine rate it “Hold” and none rate it “Sell,” with a consensus price target of US$375.75.

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