Why Booking Holdings Is A Reopening Winner — And Snap, Pinterest Are Not

The continued coronavirus vaccination effort across Western markets should soon translate to "positive reopening data points" across transportation, leisure and travel, according to BofA Securities.

This bodes well for Booking Holdings Inc BKNG, but not so much for names like Snap Inc SNAP and Pinterest Inc PINS, in the sell-side firm's view.

The E-Commerce Analyst: Justin Post made the following rating changes:

Booking Holdings upgraded from Neutral to Buy with a price target lifted from $2,550 from $2,950.

Snap downgraded from Buy to Neutral with a price target lowered from $78 to $67.

Pinterest downgraded from Buy to Neutral with a price target lowered from $94 to $78.

The Booking Takeaways: The case for a rebound in travel and tourism is based in part on vaccine data that generates a strong response against COVID-19 variants of concern, Post said in an upgrade note.

Data out of countries that are way ahead in the vaccination effort, namely Israel and the United Kingdom, point to growing interest in travel, the analyst said. 

Travel stocks could also be a beneficiary of a broader sector rotation as investors start to appreciate the group's strong prospects in 2022 and 2023, he said. 

BofA is estimating the company will see 2023 bookings improve by 8% versus 2019 levels, while total EBITDA will come in "slightly above" 2019 levels.

Granted, Booking's stock is up nearly 100% from its 2020 lows, but it trails the outperformance seen in rival travel names, according to BofA. 

Related Link: A Bullish Disney Analyst On What COVID-19 Vaccines Mean For The House Of Mouse

The Snap, Pinterest Takeaways: Both Snap and Pinterest offer investors a strong secular growth story, but investors have reason to be concerned with tough comparisons in the back half of 2021, Post said in the downgrade note.

Both stocks are trading "well above" historical averages on a P/S basis, the analyst said. 

In addition, Snap and Pinterest took advantage of unusually low interest rates and outsized growth in a struggling economy, and changing dynamics in both categories imply that multiple expansion is "unlikely," he said. 

BKNG, SNAP, PINS Price Action: Shares of Booking were trading down 1.52% at $2,252.87 at last check. Shares of Snap were down 0.91% at $57.83 and Pinterest shares were losing 1.25% at $72.10.