While Airbnb (NASDAQ:ABNB) enjoyed a spike for launching its initial public offering (IPO) during the height of the Covid-19 pandemic, ABNB stock currently has little to show for it. Following JPMorgan Chase’s price target downgrade to $110 from $185 on Wednesday, shares of the online lodging marketplace are sliding during the late-morning hours.
Currently, JPMorgan has a “neutral” rating on ABNB stock, though that might change depending on how shares perform over the next several weeks. As of this writing, shares are trading at a new low. For bearish speculators, the next logical downside target is the company’s IPO price of $68 per share. Airbnb debuted in December 2020 at a $47 billion valuation.
The crimson-laden ink represents an unfortunate change of fortune. ABNB stock hit a 52-week peak above $212. Now struggling in double-digit territory, shares need an immediate upside catalyst.
Other Analysts Weigh In on ABNB Stock
If the JPMorgan price downgrade was the only such headwind, ABNB stock might not have reacted so harshly. However, the pessimism from the financial institution follows other less-than-stellar analyst opinions.
For example, Morgan Stanley lowered its price target to $100 from $145, setting an “equal weight” rating for Airbnb in a research note issued on June 23. A day earlier, JMP Securities cut its rating of ABNB stock to “market perform” from “outperform.” On a research note on May 4, Mizuho dropped its price target to $175 from $205.
This month, out of 22 analysts, six experts had issued or maintained “strong buy” ratings. However, one analyst issued a “strong sell,” which had never appeared over the past three months. This circumstance suggests that Wall Street is increasingly becoming skeptical about ABNB stock and the underlying viability of its business.
Why It Matters
Although the rising inflation rate’s devastating impact on the dollar’s purchasing power created enormous challenges to U.S. households, the travel sector represented a surprising air pocket within the consumer economy. Dubbed “revenge travel,” the phenomenon stems from pent-up demand for memory-making experiences.
The heavy volume of negativity against ABNB stock seems to suggest that even this respite in the consumer discretionary sector is fading away. If so, investors need to be careful about diving too heavily into travel-related investments.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
