Airbnb Stock Falls as Morgan Stanley Cuts Underweight, Sees Risk of a Bearish Case Playing Out By

© Reuters. Airbnb (ABNB) shares fall as Morgan Stanley cuts underweight and sees downside risk play out

By Senad Karaahmetovic

Shares of Airbnb (NASDAQ:) are down about 3.5% pre-opening on Wednesday after analysts at Morgan Stanley cut the rating to underweight by equal weight. The analysts’ new price target of $80 per share implies a downside risk of 14% from yesterday’s closing price.

They decided to downgrade Airbnb shares after the company’s in-depth analysis raised several concerns, including listing growth, occupancy headwinds and falling demand for room nights.

“ABNB’s required futures supply has been a key debate since the IPO and our new in-depth analysis of supply and occupancy speaks to the headwinds of nascent growth,” the analysts wrote in a customer note.

As a result, they reduced the estimates “significantly” to reflect these risks, which are not so well understood by the street. Morgan Stanley is now between 10% and 20% below Street on EBITDA. They also see the “above average risk” of a bearish case for Airbnb, which would push the price towards $60 per share.

“Our supply deceleration model shows how increasingly important it is for ABNB to drive demand growth through higher occupancy and/or more available nights per listing,” added the analysts.

Airbnb stock is down 44% year-to-date (YTD).

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