Booking Holdings (BKNG) had a solid Q4 and outlook for Q1 appears achievable on Europe revenue per available room strength, with higher investments in 2026 expected to yield stronger top-line growth, BofA Securities said in a research note Thursday.

The firm highlighted that management plans nearly $700 million in strategic reinvestments in 2026 for generative artificial intelligence development, connected trip expansion, US/Asia growth, fintech growth and the loyalty program. Margins are expected to grow 50 basis points in 2026, despite impact from investments, according to BofA.

Q1 revenue growth guidance of 14% to 16% was higher than Street's 12.7% estimate, while earnings before interest, taxes, depreciation and amortization growth guidance of 10% to 14% was below the consensus of 23%, the firm noted. Q1 room night growth guidance of 5% to 7% was less than Street's 7.1% estimate, according to the report.

BofA raised its 2026 bookings and revenue growth estimate to 12% and 11%, respectively, and increased its EPS estimate to $268 from $266. For 2027, the firm expects revenue growth of 8% and EPS growth of 16%, lifting its EPS estimate to $311 from $306.

The firm said it expects competitive agentic booking capabilities to roll out this year, which could be a catalyst for Booking.

BofA maintained a buy rating on Booking but lowered the price target to $5,900 from $6,000.

Shares of Booking were down 7% in recent Thursday trading.

Price: 3911.28, Change: -358.72, Percent Change: -8.40