Airbnb stock drops on Morgan Stanley downgrade
Yahoo Finance Live anchors discuss a Morgan Stanley analyst’s Underweight rating on Airbnb stock.
Video Transcript
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BRAD SMITH: Airbnb, let's talk about shares of ABNB. They're moving lower by about 4 and 1/2%. That's following a downgrade to underweight from equal rate-- equal weight-- excuse me-- from Morgan Stanley. The bank also slashed its price target for vacation rental giant down to $80 from $110, and they're citing slowing listing growth, occupancy headwinds, and lower room night demand as reasons for the downgrade there.
And we have just seen a few of the announcements come through from Airbnb, some of them part of the winter release. But the major move that they're signaling is that going into a recession or going into an economic downturn, there are going to be more people that want to make that extra income. They're trying to tap into that market. However, the Street might be seeing some counter headwinds, if you will.
BRIAN SOZZI: Yeah, I was just hitting refresh on my Airbnb Yahoo Finance chart. Airbnb shares down 51% over the past year, despite really, they put up some good quarters.
BRAD SMITH: Yeah.
BRIAN SOZZI: Market's just not buying it.
JULIE HYMAN: Yeah. And by the way, this is not the only sell on this stock, which I was a little surprised by. This is the fourth underweight. Some of them are not from as well-known big Wall Street firms. But nonetheless, there are four of them.
And it is maybe a little bit surprising given-- I mean, obviously Airbnb has some different things that affect it rather than the bigger travel industry. We have seen strength in the bigger travel industry and airlines and hotels, for example. One of the other areas that potentially is challenged is online travel booking sites because they got a couple of downgrades this morning also.
Expedia and Tripadvisor both cut to underperform over at Wolfe Research, which says that the online travel sector should be avoided by investors. So it's quite interesting here, given what we've been hearing from companies about how strong travel is right now, that you're getting these kinds of calls. The analysts over at Wolfe says travel demand is likely to moderate.
BRAD SMITH: You know, this is one that I kind of scratch my head about because even if they're saying that travel demand is likely to moderate amid macroeconomic slowdown in 2023, we've heard on the other side of that the golden age of travel that we're entering into. And if there was an economic slowdown, wouldn't people be looking for the deals or doing more price comparison, which is exactly what these services lean into?
JULIE HYMAN: Or maybe they won't be traveling.
BRAD SMITH: Maybe they won't.
JULIE HYMAN: I mean, people cut back on travel when there's a recession. If they don't have money, they don't go anywhere. So it is possible that we're all being a little too bit-- too sanguine about leisure and revenge travel and whatever else we want to call the latest phase.
BRAD SMITH: Or maybe that it's just, at this point, winding down and that golden age of travel--
JULIE HYMAN: Maybe.
BRAD SMITH: --maybe we've already hit peak golden age.
BRIAN SOZZI: Who said these were boring markets? Look all these movers we fit in here today. What are we, like, eight or nine?
JULIE HYMAN: Who said they're boring markets?
BRIAN SOZZI: I mean, I don't know. I don't know. It's not earnings season anymore. It's December. It's a holiday. You should be hanging out with Santa or buying gifts and stuff. But we fit, like, I don't know, 9, 10 over.
JULIE HYMAN: No, you shouldn't. You should be watching Yahoo Finance.
BRIAN SOZZI: Besides that. Besides that
