Travel stocks soared in 2023 as travelers headed to new destinations in droves. But an analyst at Barclays has doubts about the industry’s ability to repeat its stellar performance next year.
That could have an impact on shares of
Airbnb
and
Expedia
,
according to Barclays analyst Trevor Young. He downgraded shares of
Airbnb
to Underweight from Equal Weight and Expedia to Equal Weight from Overweight on Tuesday. While online travel names had strong returns in 2023, Young anticipates consumer and travel spending to moderate next year, he said in a research note.
“We think online travel growth slows from here as eventually the ‘pent-up’ travel demand will get exhausted—particularly as consumers’ wallets are increasingly under pressure,” Young said.
On top of the downgrade, Young cut Airbnb’s price target to $100 from $135, which represents a 27% decrease from its opening price of $137.90 on Tuesday. The analyst acknowledged that Airbnb is the clear market leader in alternative accommodations, but said he sees a “myriad of regulatory and consumer headwinds from here, as frustration with excess fees and inconsistent cleaning policies has impacted the end-consumer experience somewhat.”
Airbnb shares fell 2.3% to $140.63 in afternoon trading. The stock has jumped 65% this year.
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Although Young removed his buy rating on Expedia, he increased his price target to $150 from $136.
“EXPE has had a great run in 2023, and as we look ahead at potentially
decelerating bookings and revenue growth as our outlook for travel softens a bit, we think it makes sense to lock in some profits and step to the sidelines,” he wrote.
Expedia stock, which has gained 65% this year, was down 2.4% to $144.80 Tuesday.
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Write to Angela Palumbo at [email protected]
