Airbnb (ABNB) shares fell in U.S. premarket trading, following Evercore ISI's decision to downgrade the holiday rentals platform operator from Outperform to In-line.
The downgrade is attributed to perceived limited near-term catalysts. Shares fell 1% on the news.
In contrast, Expedia (NASDAQ:EXPE) shares rose as much as 3.2% after the broker upgraded the rating to Outperform from In-line.
Analysts explain that Airbnb is "largely a valuation call." Despite a substantial 48% year-to-date rally, they consider it well-justified, citing robust topline growth against challenging comparisons and improved profitability.
“We see a less compelling risk/reward outlook on the stock at this price level,” the analysts said.
“We now see better risk-reward outlooks with BKNG (Outperform, $3,900 PT) and with EXPE (Outperform, $200 PT).”
Conversely, Evercore ISI sets a price target at a joint Street-high of $200 for Expedia, highlighting the company’s positioning at a "fundamental inflection point."
Analysts anticipate that revenue growth will accelerate in 2024, coupled with an expansion in EBITDA margin. These positive shifts are attributed to sustainable company initiatives and key developments.
Both Airbnb and Expedia shares are up about 48% this year.