Soon after a tricky 12 months, Morgan Stanley sees even much more downside for Airbnb . Analyst Brian Nowak downgraded the quick-phrase house rental stock to underweight from equivalent pounds. He also slashed his price tag target to $80 for every share from $110. The new goal implies downside of 14% from Tuesday’s closing stage of $93.12. Nowak pointed to likely slowing energetic listings advancement around the upcoming several several years as a vital chance for the stock. He famous: “While active listings have developed at a 12% ’18-’22 [compound annual growth rate], we see this slowing to a 7% ’22-’25 CAGR heading ahead thanks to scale and legislation of massive figures.” “Our offer model mixed with claimed nights booked empower us to determine that ABNB is at the moment working at 35% occupancy in ’22, steady with ’21 (35%) but up from 32% pre-COVID,” Nowak claimed. “The base line is we consider we have been earlier way too optimistic about ahead desire we now reduce our ’23/’24 nights booked by 5%/12%.” Slowing listings also will make Morgan Stanley’s bear circumstance on the stock a lot more possible, the analyst stated. He observed that the stock could tumble as very low as $60 for every share, which would be 35.6% underneath Tuesday’s shut. “Our product for decelerating offer speaks to how it is increasingly significant for ABNB to drive desire expansion via better occupancy and/or much more evenings out there per listing,” Nowak said. “The firm also has to do this although struggling with the threat that the following 1.5mn listings (on top of the latest 6.2mn) may well be of lessen top quality, or in less attractive travel areas.” Airbnb shares have been underneath pressure in 2022, dropping extra than 44%. Final month, the enterprise documented better-than-envisioned 3rd-quarter outcomes, but the stock fell on the back of lackluster income direction for the fourth quarter. Before this yr, sources advised CNBC that Airbnb was closing its domestic company in China. — CNBC’s Michael Bloom contributed reporting.
