Is Now the Time to Bet on Airbnb?
Airbnb Inc. (NASDAQ: ABNB) has been a popular destination for millennials in recent years. As more people are getting back to life as usual, opportunities for this stock are opening up. While the so-called reopening trade has already come and gone, there are still companies waiting for their second wind. Even though one analyst believes Airbnb might have to wait a little longer, the company is positioned very well.
Most of the analyst sentiment surrounding Airbnb over the past month has been more neutral to bullish, but this also comes as the broad markets had a couple of weeks of trading lower. The biggest bulls in recent memory are HSBC with a Buy rating and a $219 price target (8/13) and Tigress Financial with a Buy rating and a $206 price target (9/15).
On the other hand, Goldman Sachs has taken a more bearish approach and issued a Sell rating with a $132 price target. Morgan Stanley agrees, with a Hold rating and a $140 price target.
Like most things, the answer doesn’t always lie with the outliers. It usually is somewhere in the middle.
JPMorgan took a fresh look at the stock on Monday morning with its most recent call. The investment house issued a Neutral rating with a $170 price target. In the note, the analysts said:
Overall, we believe Airbnb is well positioned to benefit from underlying secular trends in travel, even with some potential near-term shift from vacation rentals to hotels with further re-opening. However, we believe risk reward is balanced as ABNB shares are trading at ~12x our ’23E revenue, a significant premium to 3.1x avg. for the Online Travel Agency (OTA) peers and a slight premium to 10.6x avg. for other category leading businesses.
In simpler terms, as the travel industry continues to improve, Airbnb stands to benefit a lot from the reopening. While it might be a little unclear right now what the timeline looks like, we can look at other industries to gauge consumer sentiment. Cruise lines look to be returning to a higher capacity in the coming months, Boeing expects rising European air traffic and more restaurants and venues are seeing easing pandemic-related restrictions.
Even though sales are not just going to shoot up at once for any particular industry, as the tide comes back in all boats get lifted. Even with the S&P 500 and Dow Jones industrials posting gains of 4% and 1%, respectively over the past quarter, Airbnb has seen a gain of over 17%.
Airbnb stock traded down over 1% to $173.387 early Monday, with a consensus price target of $175.30. The 52-week trading range is $121.50 to $219.94.
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