Airbnb (ABNB) Progressing After Upgrade to ‘Overweight’ at KeyBanc Ahead of Q2 Print

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KeyBanc analyst Justin Patterson raised shares of Airbnb (NASDAQ: ABNB) to “Overweight” of “Sector Weight” ahead of the second quarter print (Thursday, after market close).

Patterson switched to the bullish side as he believes favorable market conditions can help stocks outperform market expectations.

“Data from AirDNA and our Key First Look (KFL) data set show continued improvements in US ADRs and gross bookings volume. By incorporating the strength of ADR into our model, we forecast second-quarter bookings of $ 11.4 billion (2% above the street) and EBITDA of $ 136 million (mostly above the street). Coupled with the first signs of an upturn in supply, we are more comfortable with sustained growth in 2022 and beyond, ”the analyst said in a note sent to clients.

In addition to the positive market environment, continued direct traffic advantages should also generate favorable winds as the second quarter print approaches.

“~ 90% of Airbnb‘s traffic comes directly from the site / app, and the company spends significantly less than its peers in digital advertising channels. Not only does this make Airbnb more insulated from digital ad inflation, it also provides more room for margin expansion as revenue picks up. Both conditions are present today, which we believe leads to significant revenue and EBITDA revision potential relative to its peers, ”adds Patterson.

Based on these estimates, the analyst raises projections for 2021, 2022 and 2023 to reflect the strength of ADR over the period. A target price of $ 180.00 per share reflects these higher estimates.

“While this represents a premium for BKNG (~ 5.1x), we believe it is justified due to Airbnb’s faster growth rate, potential for margin expansion and the benefit of direct traffic. . The ABNB last closed at around 9.8x 2023E EV / S, ”concludes Patterson.

The company’s shares are up 1.7% pre-opening on Tuesday.


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