BKNG – Market expectations are for Uniform ROA to recover, but management may have concerns about demand, margins, and initiatives

March 22, 2022

  • Booking Holdings (SPGI) currently trades below corporate and historical averages relative to Uniform earnings, with a 22.3x Uniform P/E (Fwd. V/E’).

  • At these levels, markets are pricing in expectations for Uniform ROA to recover to 422%, accompanied by 9% Uniform asset growth.

  • Meanwhile, analysts expect Uniform ROA to rebound to a peak of 819% in 2023, accompanied by 6% Uniform asset shrinkage.

  • If sustained going forward, these levels would imply a stock price closer to $2,116, representing marginal 7% equity downside for the firm.

  • Moreover, the firm’s most recent earnings call suggests management may have concerns about demand, margins, and initiatives.

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