Never in history had the world seen such a drop off in tourism and travel until the COVID-19 pandemic in early 2020. Airbnb Inc. (ABNB) was fortunate enough to not be traded publicly until December 2020, and is now poised to capture the “biggest travel rebound in a century,” as one analyst put it. The world has changed a great deal over the last year, and with it, so have consumer trends and desires.
Justin Post of Bank of America published a report detailing the more than 100 updates Airbnb made to its platform. Post reiterated a Hold rating and assigned a price target of $180, reflecting a potential upside of 21.26%.
The five-star analyst wrote that the recently released upgrades will help Airbnb ride the fading pandemic’s tailwinds, as consumers look to book vacations on a more flexible basis. He delineated several reasons for this focus on flexible bookings, including an increase in remote work-from-home freeing up weekend time. Also, longer trips, which require longer-term hospitality solutions, are becoming more common.
Many updates to the platform were directed to aid less professional hosts, providing streamlined property listing processes and a more organized and simplified support platform from which to manage bookings. Airbnb hoped to improve search capabilities for matching guests with hosts as well.
In regards to share price action, a post-IPO lockup period recently expired and over $500 million in shares were made liquid. Although share price took a high volume hit for a day, the stock soon recovered and Post is encouraged that investors have moved past it.
The analyst also mentioned that Booking.com of Booking Holdings Inc. (BKNG) has more exposure to the European markets, and as such stands to benefit more than Airbnb as U.S. travelers look to book trips abroad. Another downside can be opined that the travel industry recovery is already baked into Airbnb’s share price. Therefore, stock price would not necessarily be influenced by the number of borders opening up this year for recreational tourism.
On TipRanks, ABNB has an average rating consensus of Moderate Buy, and an average analyst Airbnb price target of $172.08, indicating a potential 12-month upside of 15.93%.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.