Market News

ABNB, BKNG Slip after Analysts Downgrade

If you’re planning a trip any time soon, you’re one of a rare breed. At least, that’s what a growing number of analysts think about travel and hotel stocks. Both Airbnb (NASDAQ:ABNB) and Booking (NASDAQ:BKNG) shares took hits in Wednesday trading thanks to some new—and disappointing—feedback from Wall Street. The first sign of trouble emerged from Robert Mollins, a Gordon Haskett analyst, who cut his rating on Airbnb from Hold to Sell. Reports noted he also cut the price target on the stock, dropping it from $94 to $87.

Mollins also dialed back his appraisal of Booking stock, dropping it from Buy to Hold and taking the price target down to $2,456 per share. He wasn’t alone here; Justin Post of Bank of America (NYSE:BAC) dropped Booking from Buy to “neutral” and set a price target of $2,700 per share. The biggest reason for the decline seems to be trouble in the travel sector. As disposable income is threatened by soaring inflation and a slumping economy, people aren’t likely to travel anywhere.

However, there’s a sizable number of analysts who don’t see problems coming. Jefferies analyst John Colantuoni reiterated a Buy recommendation on Airbnb. Barclays’ Mario Lu maintained a Buy rating on Booking. Both issued these reiterations just yesterday.

Overall, analyst consensus calls Booking a Strong Buy and Airbnb a Moderate Buy. Yet there’s a clear difference in upside potential on each stock. Airbnb has an upside potential of 19.35%, thanks to its average price target of $122.14. Booking’s average price target of $2,455.59 per share, however, only allows a 3.41% upside potential.

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