It’s time to step to the sidelines on shares of Airbnb as the pandemic recovery bump fades, according to KeyBanc Capital Markets. Analyst Justin Patterson downgraded shares to sector weight from overweight, saying he expects a near-term peak in margins and slowing revenue growth that will hurt the vacation rental company. ABNB 1D mountain Airbnb “Our call is that leisure travel has experienced a material recovery from 2021-2023E, resulting in outsized margin expansion, ” Patterson wrote in a Monday note. “As these tailwinds fade, we see elevated risk to [room nights and experiences] and [average daily rate] growth.” Airbnb has outperformed this year as a resilient consumer shelled out money for travel and experiences. Shares are higher this year by nearly 60%, while the S & P 500 gained roughly 12% over the same time period. But Patterson expects a normalizing travel market will be an overhang on the stock. The analyst said his 2024 and 2025 forecasts for earnings before interest, taxes, depreciation and amortization are 8% and 5% below consensus, respectively. “We believe this could create an overhang on shares as ABNB transitions from a growth to GARP investor base,” Patterson said. The analyst added that this overhang starts in the fourth quarter. He specifically called out restrictions for Airbnb listings in New York City, which is a popular destination for New Year’s Eve. To be sure, the analyst said Airbnb could shrug off those concerns if the average daily rate could proves more resilient than feared, or if it rolls out new services faster than expected. Shares were lower by 3% in Tuesday premarket trading. —CNBC’s Michael Bloom contributed to this report.
