Jefferies Raises Price Targets on Airbnb (ABNB) and Booking (BKNG), Expects Them to Outperform Rivals Going Into Q4 and'‘22

November 1, 2021 5:54 AM EDT
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Price: $147.90 -5.63%

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    16 Buy, 19 Hold, 2 Sell

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    Up: 24 | Down: 13 | New: 20
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Jefferies analyst Brent Thill raised price targets on Buy-rated Airbnb (NYSE: ABNB) and Booking (NASDAQ: BKNG) ahead of their earnings reporting this week.

New price targets are $200.00 per share and $2,850.00, respectively, up from $190.00 and $2,800.00. The analyst expects travel companies that have a higher cross-border and European exposure to outperform US-focused names.

“On the back of strong 2Q results, ABNB, BKNG and EXPE have outperformed the market by ~6pts on avg since their prints. The momentum in travel demand from 2Q continued into 3Q but lost some steam in late summer as rising new cases prompted renewed restrictions. A look at proprietary and 3P high-frequency data, tracking travel-related activity, shows that the majority of metrics improved in 3Q but lost momentum in the 2H of the quarter. Against that backdrop, we think expectations are somewhat elevated but achievable going into 3Q earnings. Looking forward, with vaccination rates across major travel markets in W. Europe now above the US, we expect the recovery in travel to accelerate, once EU/UK-US travel restrictions are lifted,” Thill said in a client note.

On ABNB, Thill argues that the stock reflects weakening concerns about growth sustainability, the longevity of use cases and inventory availability. The analyst is calling for $12.2B/$2.04B/$0.73 in Q3 bookings/net revenues/EPS vs consensus of $12.3B/$2.06B/$0.72.

As far as BKNG is concerned, Thill is projecting $22.1B/$4.2B/$1.7B/$30.41 in Bookings/Rev/AdjEBITDA/EPS vs. cons at $22.5B/$4.3B/$1.8B/$32.89.

On Expedia (NASDAQ: EXPE), rated as Hold with a price target of $175.00 per share, the analyst argues that Q3 expectations are “achievable” amid the continued strength in the US. Thill is projecting $21.0B/$2.7B/$644M/$1.82 in Bookings/Rev/AdjEBITDA/EPS vs. cons at $20.5B/$2.7B/$615M/$1.68.

Finally, Underperform-rated Tripadvisor (NASDAQ: TRIP) has seen its estimates slashed by Thill amid “worsening traffic trends and lower expectations from Plus.” The analyst is now forecasting $301M/$75M/$0.20 Revenue/AdjEBITDA/EPS vs. cons at $307M/$76M/$0.24.

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