Morgan Stanley recommends avoiding Airbnb stocks for 2023
Airbnb Inc (NASDAQ: ABNB) had a rather difficult 2022 and, unfortunately, next year probably won’t be good either – according to a Morgan Stanley analyst.
Airbnb stock will continue to fall
Brian Nowak downgraded the vacation rental company this morning to “underweight” and said the shares could drop further to $80 – a further 15% drop from here.
Are you looking for fast news, tips and market analysis?
Sign up for the Invezz newsletter today.
He is confident growth will slow from now on as Airbnb continues to mature as a business.
Airbnb’s required term 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.
From 2018 to 2022, the Nasdaq-listed company increased its listings by approximately 12%. But the Morgan Stanley analyst expects that growth to be 7.0% or less through 2025. For the year, Airbnb Stock is down 50% at writing.
Nowak also presented a bear case
Nowak also offered a “bearish case” that sees the stock plummet to $60 per share. More alarmingly, he says there is an above average risk of this happening since this valuation is based solely on a multiple comparable to peers like Booking Holdings. The note reads as follows:
Our supply slowdown model shows how increasingly important it is for Airbnb to drive demand growth through higher occupancy and/or more available nights per listing.
Analyst is dovish on Airbnb stock also because he disagrees with consensus that occupancy rate will reach 44% by 2025. It now calls for 8.0% EBITDA growth next year and 14% in 2024.
Last month, Airbnb reported a strong third quarter but lower guidance for the fourth quarter.