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• Piper Sandler analyst Thomas Champion termed Airbnb’s valuation as “stretched”
• Expedia has an ‘undemanding’ valuation, he said
Airbnb Inc stock fell 8% in early Monday trading after a Piper Sandler analyst downgraded the shares.
Analyst Thomas Champion downgraded Airbnb from overweight to neutral, lowering the price target to $169 from $215. At the same time, he upgraded Expedia Group’s stock to overweight from neutral on Monday.
Champion wasn’t too worried about the travel sector, despite concerns about the omicron variant. He said that “methodical (if non-linear) travel recovery appears underway.” Travelers have become “increasingly ‘desensitized’ to virus headlines, suggesting entry into an endemic phase versus a pandemic,” he added.
He viewed Airbnb’s valuation as “stretched.” In a research note, the analyst said the downgrade was based on elevated Street expectations, the current valuation, and the fact that it being a pure-play focus may be less desirable as travel normalizes.
“In our view, this premium is more difficult to justify based on growth,” he wrote, as Airbnb’s three-year “recovery trajectory doesn’t look that different” from what the other online-travel companies may see.
The stock trades at 12 times estimates for an enterprise value to 2023 sales, compared with 5 times for Booking Holding Inc. and 2 times for Expedia.
Picture Credits: Analytics India Magazine