Airbnb Stock Set To Benefit From 'Strong Travel Environment,' Analyst Says

Resiliency in travel demand, coupled with a favorable foreign exchange environment, may push Airbnb Inc ABNB shares to new heights, Keybanc Capital Markets said in a Monday note to investors. Here's what investors need to know.

The ABNB Analyst: Justin Patterson maintained an Overweight rating on the travel stock while he upgraded the price target from $135 to $160.

The ABNB Takeaways: Airbnb is showing signs of consistent growth amidst a strong travel environment, Patterson said in the Monday note.

Travel data suggest the consumer has held in, and that spend, particularly on Airbnb, reaccelerated in May and June. The company navigated the path well, Keybanc said, with shifts in marketing spend from the third quarter to the second quarter poised to create a new EBITDA margin high-water mark during the current quarter.

The company’s success is not limited to the domestic market; a favorable foreign exchange environment recently offset the near 9-point headwind Airbnb’s bookings faced in the same quarter of last year. The analyst said that regional mix matters heading into earnings season, with international exposures being particularly important for revenue growth.

Speaking of earnings, the San Francisco-based travel giant is set to issue its second quarter print on Aug. 3. Analysts expect the company to issue earnings of 75 cents per share on revenues of $2.42 billion, according to Benzinga Pro.

Airbnb’s strategic marketing initiatives and stronger-than-expected average daily rates (ADRs) also contribute to Keybanc's bullish outlook. Airbnb's shift of marketing spend to the first half of 2023 and favorable ADR dynamics should help to mitigate some pressure from regional and property mix shifts, Patterson said.

ABNB Price action: Shares of Airbnb are trading 0.95% lower to $147.36, according to Benzinga Pro.

Photo: Shutterstock