Airbnb Stock Is Sliding Today: What's Going On?

Airbnb Inc ABNB shares are trading lower Wednesday following a downgrade from Morgan Stanley. 

What Happened: Morgan Stanley analyst Brian Nowak downgraded Airbnb from Equal-Weight to Underweight and lowered the price target from $110 to $80, citing decelerating supply growth ahead of the company. 

Morgan Stanley did a deep dive into Airbnb's supply and occupancy metrics and found several headwinds. The firm noted that active listings have grown around 12% annually from 2018 through 2022, but Morgan Stanley expects this to slow to around 7% over the next three years.

"Even our 7% forward CAGR may prove optimistic as it implies ABNB adds 500K active listings per year, a step up from the 100k/400k new listings added in '21/'22," Morgan Stanley wrote in a new note to clients.

Morgan Stanley expects the slowdown in supply to create occupancy headwinds and lower forward room night demand. 

"While we expect occupancy to improve going forward, we struggle to see it improving at a faster rate than it has in the past," the analysts said.

Morgan Stanley expects the stock to be trading around $80 a year from now if occupancy improves slightly. If occupancy doesn't tick higher, Morgan Stanley said there is a higher probability for its bear case of $60 per share.

See Also: Jeff Bezos Backed Airbnb Before Its IPO, He Also Invested In This Company

ABNB Price Action: Airbnb has a 52-week high of $191.73 and a 52-week low of $86.71.

The stock was down 4.01% at $89.39 at time of publication, according to Benzinga Pro.

Photo: giovanni gargiulo from Pixabay.