Wells Fargo bearish Airbnb, Booking Holdings and Expedia

Wells Fargo released notes on Airbnb (NASDAQ:), Booking Holdings (NASDAQ:), and Expedia (NASDAQ:) on Thursday, initiating Underweight ratings on the travel stocks.

Analysts assigned a $99 price target on ABNB, stating that the company’s new initiatives “‘Rooms’/pricing tools are logical in the context of waning share gains vs. hotels post-COVID,” but they “don’t believe impact of these changes are reflected in ’24/’25 44%/50% Street incremental margin estimates.”

On BKNG, the analysts set a $2,257 price target on the stock, stating that the company’s increased references to merchandising in filings and earnings indicate a higher promo intensity.

“Concurrently, revs mixing towards low-margin payments/flights. Higher out-year margin expectations appear incongruous,” they wrote.

Expedia’s price target was set at $93 per share. The analysts said the firm sees a number of data points indicating elevated OTA competition for EXPE.

“BKNG leaning into ‘merchandising’, EXPE retooling loyalty, ABNB working to lower ADR. Difficult to reconcile with ’24 Street incremental margins of 32% vs.pre-COVID 20-25% range,” they wrote.