Just as many travelers were getting ready to book vacations, the Delta variant of COVID-19 appeared. For certain companies dealing in short-term accommodation options, this is but one headwind in a storm of largely positive developments. Airbnb, Inc. (ABNB) has been seeing a momentum- building wave of both high demand for all types of vacations, as well as an increasing supply of properties with which to meet that curve. (See Airbnb stock charts on TipRanks)
Providing his bullish hypothesis on the company is Brian Fitzgerald of Wells Fargo, who wrote that Airbnb has knocked out a “key pillar of the bear case” by successfully raising listing supply. The firm recently ran a campaign to recruit hosts, which saw optimistic results.
Fitzgerald reiterated his Buy rating on the stock, and raised his price target to $210 from a former $200. This new price target represents a possible 12-month upside of 37.47%.
The five-star analyst explained that Airbnb reported strong earnings, and beat on several key metrics. The company saw a large pickup in bookings over Q2, and now is seeing pre-pandemic level demand in some major cities. This comes as a surprise, as nonurban bookings had been more popular while urban areas were under lockdown.
Long-term stays remain ABNB’s most popular option, and Fitzgerald expects this trend to continue. He is encouraged by the company’s position to capitalize on the increased work flexibility the past year-and-a-half has instilled in many professional roles.
While the Delta variant lingers as a concern, international bookings continue to climb. Fitzgerald is confident in the sentiment held by Airbnb’s management that Q3 is expected to deliver record revenues.
The company has considerable leverage over competitors, as it works with both professional property managers as well as smaller, more private hosts.
On TipRanks, ABNB has an analyst rating consensus of Moderate Buy, based on 13 Buy and 8 Hold ratings. The average Airbnb price target is $179.10, suggesting a potential 12-month upside of 17.24%. ABNB closed trading Friday at a price of $152.76 per share.
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.