Investing.com -- Jefferies upgraded Airbnb to Buy from Hold on Monday, citing durable growth in the company’s core lodging business and significant upside potential from experiences and take rate expansion.
The firm also raised its price target to $185 from $165, noting that Airbnb’s core lodging business alone is worth its current valuation, with additional upside from new revenue streams.
“ABNB has delivered 10%+ Bookings growth since the pandemic ended, or 16 quarters and 4 straight years,” said the bank.
The firm adds that last quarter, bookings growth accelerated by 500 basis points year-over-year to 15%, the highest in nearly two years, driven by investments in expansion markets.
Jefferies sees a long runway for share gains in lodging, supported by demographic tailwinds, expansion into underpenetrated markets, diversification of marketing channels, and potential expansion into new listing types such as hotels.
Beyond lodging, Jefferies highlighted Airbnb’s relaunch of its Experiences segment as a major growth opportunity.
The firm estimates that $260 billion is spent on experiences globally, yet only $70 billion is currently booked online. As online penetration rises from 28% today to 65% by 2030, Jefferies forecasts Airbnb’s market share in experiences will double to 6%, adding $8 billion in bookings and $1.6 billion in revenue by 2030.
Furthermore, Jefferies sees take rate expansion as a major revenue driver, estimating 400 basis points of upside by 2030, led by sponsored listings, host/guest services, and insurance.
They believe this could contribute $8.2 billion in additional revenue by the end of the decade.
Jefferies concluded that Airbnb’s free cash flow, competitive moat, and insulation from AI-driven disruption justify its valuation and support further stock appreciation.
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