5 Airbnb Analysts Bump Up Price Targets Following Q4 Print; 'Fundamental Outlook Promising'

Airbnb, Inc. ABNB reported strong quarterly results and also issued an upbeat forecast for the first quarter.

The Airbnb Analysts: Needham analyst Bernie McTernan reiterated a Buy rating on Airbnb shares and increased the price target from $210 to $220.

Morgan Stanley analyst Brian Nowak maintained an Equal-Weight rating and increased the price target from $160 to $175.

Credit Suisse analyst Stephen Ju maintained a Neutral rating and increased the price target from $179 to $185.

Raymond James analyst Aaron Kessler maintained a Market Perform rating.

KeyBanc Capital Markets analyst Justin Patterson reiterated an Overweight rating and hiked the price target from $194 to $210.

The Airbnb Theses:

Needham Says Airbnb Set Up For Record Year In 2022: Airbnb's outperformance is attributable to the better-than-expected average daily rate, or ADR, Needham analyst McTernan said. ADR drove the bookings beat, helping to offset the lower-than-expected nights and experiences booked, the analyst said.

The company guided to year-over-year growth in ADR in the first quarter, but cautioned of a mix shift pressuring for the remainder of the year, the analyst noted.

The analyst expects nights and experiences to be at record levels in the first quarter, setting Airbnb up for a record year in 2022.

"The summer travel season is off to a fast start, with 25% more nights booked relative to this time in 2019," the analyst noted.

On the flip side, the company expects flat margins in 2022 compared to the previous year due to continued marketing spend and headwinds from ADRs, he added.

Related Link: How Airbnb's Valuation Compares To The Existing Hotel Industry

Morgan Stanley's 3 Key Takeaways: Airbnb's 2022 growth profile is better than modeled, given the better-than-expected first-quarter revenue guidance and normalization in consumer travel behavior, Morgan Stanley analyst Nowak said.

Secondly, the company is on track for accelerating pace of innovation in 2022, the analyst said. The pace of new product introduction is expected to follow a similar biannual pace to 2021, he added.

Airbnb's profitability continues to improve, with the fourth-quarter EBITDA exceeding expectations, Nowak noted.

RayJay Is Positive On Fundamentals: Airbnb's guidance is likely conservative and margins will likely continue to expand in 2022, RayJay analyst Kessler said. The analyst said he remains positive on fundamentals.

The optimism is premised on a large nights-and-experiences total addressable market, the analyst said. The company has a leadership position and strong brand, driving significant organic traffic, he added.

A shift to alternative accommodations, global expansion and continued innovation will likely drive about 20% long-term revenue growth and over 30% long-term EBITDA margins, Kessler said.

"While we have a positive fundamental outlook, we believe shares are fairly valued at current levels," RayJay noted.

KeyBanc Says Outlook Remains Bright: Airbnb demonstrated material profit margin expansion in 2021 and exited the year with trends resilient to Omicron, KeyBanc analyst Patterson said.

Given Airbnb outperformed even before recovery started in core markets, the outlook for long-term revenue growth and margin expansion remains bright, the analyst said.

KeyBanc expects EBITDA to increase by over 35% annually over the next two years.

Airbnb Price Action: At last check, Airbnb shares were advancing 5.50% to $189.86.

Related Link: Airbnb To Offer Stay In 'Home Alone' House And Watch New Disney+ Movie

Photo: Courtesy of Open Grid Scheduler on Flickr