PhillipCapital Upgrades Airbnb to Neutral, Raises Price Target to $127

PhillipCapital has upgraded Airbnb's rating from Reduce to Neutral and raised the price target from $112 to $127. The firm expects steady demand for travel and strong growth in the Asia Pacific and Latin America regions, but notes that new initiatives like local experiences will not make meaningful contributions to revenue until 2026.

PhillipCapital has upgraded Airbnb's rating from Reduce to Neutral and raised the price target from $112 to $127. The upgrade is driven by stabilizing travel demand and modest sales growth expected through 2025, primarily in the Asia Pacific and Latin America regions [1]. Despite recent price performance, the firm expects Airbnb's revenue to rise 9% year-over-year to $4.06 billion for the third quarter of 2025, with encouraging demand trends and accelerating Nights and Seats Booked across several key markets [1].

PhillipCapital maintains its weighted average cost of capital (WACC) at 7.0% but increased the terminal growth rate to 3.5% from 3.0%, citing stabilizing travel demand as the primary factor. The firm expects modest sales growth through 2025, driven by stable travel demand and strong growth in the Asia Pacific and Latin America regions. However, new initiatives from Airbnb, such as local experiences, are not expected to scale and contribute meaningfully to revenue until fiscal year 2026 [1].

The upgrade comes after recent analyst actions following Airbnb's second-quarter performance. TD Cowen raised its price target for Airbnb to $150, highlighting the company’s 7.4% increase in nights booked, which surpassed expectations [2]. Benchmark maintained its Buy rating with a $155 price target, noting Airbnb’s growth in nights and seats, which may meet market whisper numbers despite guidance challenges [2]. Meanwhile, Cantor Fitzgerald lowered its price target to $110 due to growth concerns, maintaining an Underweight rating [2]. JPMorgan increased its price target to $130, observing that the second-quarter results were in line with investor expectations and noting progress in Airbnb’s business expansion [2]. Bernstein reiterated an Outperform rating with a $165 price target, emphasizing Airbnb’s 10.5% revenue growth in constant currency terms despite macroeconomic challenges [2].

Airbnb's second-quarter revenues surged 13% year-on-year to $3.1 billion, driven by higher nights stayed, a small increase in average daily rates, and the timing of Easter [3]. The company reported 134.4 million nights and seats booked, up 7% on the year, with growth across all regions and the strongest increases in Latin America and Asia Pacific [3]. Adjusted earnings before interest, tax, depreciation, and amortization rose 17% to $1 billion. The company repurchased $1 billion of Class A common stock during the quarter and announced a new $6 billion share buyback program [3].

PhillipCapital's upgrade reflects the stabilizing travel demand and modest sales growth expected through 2025. However, the firm's outlook is subject to the continued impact of global economic uncertainty and potential challenges in the travel industry.

References:
[1] https://www.investing.com/news/analyst-ratings/airbnb-stock-rating-upgraded-by-phillipcapital-as-travel-demand-stabilizes-93CH-4181906
[2] https://www.hotelowner.co.uk/197831-airbnb-q2-revenues-surge-13-to-3-1bn/
[3] https://www.ainvest.com/news/airbnb-upgraded-neutral-phillip-securities-stabilizing-travel-demand-2508/