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Travel booking website Booking Holdings (BKNG) - Get Booking Holdings Inc. Report  was down 0.64% in trading Tuesday to $1,745 after being downgraded to market perform from outperform at research firm Telsey Holdings. 

The downgrade was due to what Telsey sees as a weaker economic outlook and the growing threat from Alphabet's Google (GOOGL) - Get Alphabet Inc. Report and Airbnb, which recently purchased Hotel Tonight and placed itself in even more direct competition with Booking Holdings.

The firm also lowered its price target to $1,800, which represents a 2.5% upside from the stock's previous closing price. 

"We are lowering our PT to $1,800 and downgrading the stock to MP due to: (1) a weaker European economic outlook; and (2) growing threats from Airbnb and Google, which are now encroaching on BKNG's core hotel offering... While BKNG's valuation is not overly stretched, we believe these incremental challeges warrant a move to the sidelines," the note said. 

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Despite these headwinds, there are positives still apparent in the company's fundamentals, according to Telsey. 

"While BKNG's valuation is not overly stretched (considering its B/S, low capital spending, and exposure to independents), we believe these incremental challenges warrant a move to the sidelines," warned the Telsey analyst team.

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