Morgan Stanley downgrades Airbnb over travel demand issues, shares fall over next 12 months
After a tough year, Morgan Stanley sees even more downside for Airbnb. Analyst Brian Nowak downgraded short-term rental housing stock to an underweight from an equal weight. He also cut his price target to $80 per share from $110. The new target implies a 14% decline from Tuesday’s close of $93.12. Nowak pointed to the potential slowdown in active listing growth over the next few years as a key risk for the stock. He noted: “While active rosters grew 12% ’18-’22 [compound annual growth rate], we see this slowing down to a CAGR of 7% from 22 to 25 going forward due to scale and the law of large numbers.” ’22, consistent with ’21 (35%) but up from to 32% pre-COVID,” Nowak said. “Ultimately, we believe we were previously too optimistic about demand going forward; we are now reducing our ’23/’24 nights booked by 5%/12%. Morgan Stanley bearish on the stock, the analyst said. He noted that the stock could drop as low as $60 per share. , which would be 35.6% lower than Tuesday’s close. “Our supply slowdown model shows how increasingly important it is for ABNB to drive demand growth through higher occupancy and/or more available nights per listing,” Nowak said. . “The company also has to do this while facing the risk that the upcoming 1.5 million listings (in addition to the current 6.2 million) will be of lower quality or in less desirable travel locations.” Airbnb shares have been under pressure in 2022, falling more than 44% The company announced better-than-expected third quarter results last month, but the stock fell due to lackluster fourth quarter revenue forecasts. Earlier this year, sources told CNBC that Airbnb was closing its domestic operations in China. – CNBC’s Michael Bloom contributed reporting.
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