Emily Dattilo
Airbnb stock could be a winner no matter who picks up gold medals in the Summer Olympics, one Wall Street team argued.
Mizuho Securities analysts led by James Lee upgraded shares of the short-term stay site to Buy from Neutral, lifted their target for the price to $200 from $150, and raised their fiscal 2027 estimate for earnings before interest, tax, depreciation, and amortization in a Tuesday report.
In trading Wednesday, Airbnb stock was up 0.3% to $161.50, while the S&P 500 edged 0.3% lower.
The Mizuho team presented a trio of reasons for the upgrade.
First, they expect the potential launch of sponsored listings to offer double-digit-percentage upside in Ebitda over the long term. "We believe sponsored listings are a natural extension for ABNB, given its fragmented supplier base and opportunity for consumer discovery, and the non-standardized nature of home accommodation," the analysts wrote.
Second, they are less concerned about Airbnb's room-night growth this year, noting how Wall Street has pulled back estimates since the company said in February that it expects the growth rate of nights booked in first quarter to moderate relative to the fourth quarter.
And third, "[W]e see levers to exceed expectations as seasonality in 3Q24 does not reflect incremental demand from the Summer Olympics in Paris," Mizuho wrote. "At the same time, ABNB could gain share as hotel average daily rates could remain elevated due to shortage in staff."
Write to Emily Dattilo at emily.dattilo@dowjones.com
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April 24, 2024 12:06 ET (16:06 GMT)
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