Key Points:
- Airbnb shares down 8% on Piper Sandler downgrade
- Stock downgraded to Neutral from Overweight
- Expedia upgraded based on increased holiday bookings
Like the long list of travel companies accustomed to pandemic volatility; Airbnb stock has had a wild ride since its IPO at the end of December 2020. Current speculation surrounding likely growth potential is currently focused on the anticipated return of the travel sector.
A BofA analyst last week outlined that current sentiment will work in favor of airline stocks, as holidays and travel trickle back into market trends.
Piper Sandler’s downgrade of Airbnb today shines some light on what 2022 might look like in terms of travel trends – with air travel front and center stage, whilst companies like Airbnb come under pressure from competitive hotels and attractive all-inclusive flight packages, or as Piper Sandler commented, a return to ‘traditional lodgings and air’.
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Although Omicron looms, looking at the travel landscape since 2020; signs of recovery suggest that 2022 with likely prove better than 2021 – but as mentioned, growth areas might be slightly more specific. As well as downgrading Airbnb to Neutral, Piper Sandler also upgraded Expedia to Overweight – based on estimations of increased foreign holiday bookings.
This isn’t necessarily awful news for Airbnb, and to some extent, it was probably expected. Domestic holidays stoked the company stock at a time when the majority of travel industry leaders grew stagnant as they could do nothing but watch revenue plummet. Airbnb is still a fledgling on the public market, and while the company will likely continue its strong growth, its companies like Expedia and its competitors that will really feel the travel bounce.
