Booking Holdings vs. Target: Which Consumer Stock Is a Better Buy for 2027?

One represents the rebound in global travel while the other serves as a cornerstone of American retail. Choosing between Booking Holdings Inc. (NASDAQ:BKNG) and Target Corp. (NYSE:TGT) depends on your growth and stability preferences.

Booking operates a high-margin digital platform connecting travelers with accommodations and flights. Target maintains a massive physical and digital footprint, selling everything from groceries to apparel to loyal guests. While they occupy different sectors, both compete for a share of consumer spending as economic conditions shift toward 2027.

The case for Booking Holdings

Booking operates through major brands such as Booking.com and Priceline, providing online travel services in 220 countries and territories. In 2025, the company facilitated approximately 1.2 billion room nights for travelers around the globe. It relies heavily on major search platforms, notably Alphabet Inc. (NASDAQ:GOOGL), to drive consumer traffic to its digital properties.

In FY 2025, revenue reached about $26.9 billion, representing a growth of roughly 13.4% compared to the previous year. This performance translated into a net income of approximately $5.4 billion. While the top line grew, the net margin, which measures how much profit a company keeps from every dollar of sales, was about 20.1%.

As of its December 2025 balance sheet, the debt-to-equity ratio is negative 3.5x, which means total liabilities exceed shareholder equity. The current ratio, a measure of a company's ability to pay short-term obligations with short-term assets, is approximately 1.3x. In FY 2025, free cash flow reached around $9.1 billion, which is the cash a company generates after accounting for capital expenditures to maintain its operations.

The case for Target

Target serves millions of customers through its nearly 1,995 stores and a robust digital platform. It differentiates itself among retail stocks through strategic partnerships with major brands. These partnerships include names like Apple Inc. (NASDAQ:AAPL), CVS Health (NYSE:CVS), Starbucks Corp. (NASDAQ:SBUX), and Ulta Beauty (NASDAQ:ULTA).

In FY 2025, revenue reached roughly $104.8 billion, which reflected a slight decline of approximately 1.7% from the prior year. The company reported a net income of about $3.7 billion for the same fiscal period. Its net margin was approximately 3.5%, reflecting the higher costs associated with inventory management and physical store operations.

As of its January 2026 balance sheet, the debt-to-equity ratio is roughly 1.3x, indicating the proportion of debt used to finance assets relative to shareholder equity. The current ratio is approximately 0.9x, suggesting its short-term assets are slightly lower than its short-term liabilities. Free cash flow for FY 2025 was around $2.8 billion, representing the cash a company generates after subtracting capital expenditures used to expand its business.

Risk profile comparison

Booking faces intense competition from global technology firms and other online travel companies that could disrupt its reservation process. The company is also navigating significant dependence on third-party digital platforms for its visibility and customer traffic. Additionally, legal and regulatory risks involving data privacy and international competition laws, particularly in the European Union, remain a primary concern for the business.

Target must contend with intense retail competition and the constant pressure to differentiate its guest experience through merchandise and digital channels. Supply chain disruptions and volatile global trade policies, including its reliance on goods imported from China, pose ongoing operational challenges. Furthermore, the company faces risks related to inventory management, shrink, and potential cybersecurity incidents that could compromise guest or team member data.

Valuation comparison

Booking trades at a slightly lower multiple of future earnings estimates, whereas Target features a lower price relative to sales over the past twelve months.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

The Forward P/E compares the stock price to future earnings estimates, while the P/S ratio measures the stock price relative to sales over the past twelve months.

Which stock would I buy for 2027?

Target is in the first year of its multi-year turnaround strategy, which aims to restore top-line growth and margins. It's been going well, but there is concern that elevated gas prices, which raise transportation costs and reduce consumers' spending capabilities, could derail the turnaround story over the near term. But to its benefit, Target is the most-followed retailer on social media platforms, has a strong women's clothing business, and should be able to capture more food business by expanding the section in remodeled stores. About half of Target sales include food items of some sort.

For fiscal 2027, Target is expected to see a sales gain of nearly 6%, to more than $110 billion, which is pretty good considering the pinched American consumer. Net income should improve much more strongly, to more than $1 billion, up to $4.7 billion.

Booking Holdings is successfully shifting from an agency model to a primarily merchant model. That means it used to make its money as an agent--connecting travelers to a hotel and collecting a commission while the hotel manages collecting payment from the traveler. In the merchant model, Booking buys capacity from hotels and other providers on its platform and collects payment directly from the traveler. This tends to lead to fatter margins.

The company is also in excellent financial shape. It has $16 billion in cash, which makes its balance sheet investment grade. Another plus for shareholders is that the company has a $20 billion share buyback program. The brand is increasingly a destination for travelers, which means it is paying less to companies like Google for search engine visibility. Today, two-thirds of Booking.com's visitors are organic, meaning they are direct visitors rather than from paid ad traffic.

Revenue will grow about 9% this year to $29.3 billion. And net income takes a healthier 50% leap to about $8.1 billion.

That Booking Holdings stock is cheaper, on a forward P/E ratio, than Target's is an opportunity to buy a fast-growth business at a very reasonable price. Target has a strong case to regain its shopper mojo, but at prices like these, Booking's shares are the ones to buy.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Booking Holdings, Starbucks, Target, and Ulta Beauty. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.