On Wednesday, Mizuho Securities showed a positive shift in its stance on Airbnb Inc . (NASDAQ:ABNB) stock, upgrading from Neutral to Buy and raising the price target from $150 to $200. The decision was influenced by a comprehensive analysis of Airbnb's key performance indicators, which revealed several factors that could drive the company's future growth.
The firm identified three main drivers behind the upgrade: the potential introduction of sponsored listings, which could significantly increase EBITDA in the long term; a de-risked outlook for fiscal year 2024 room night growth, minimizing downside concerns; and the prospect of beating room night growth expectations due to additional demand from the Summer Olympics and market share gains as a result of higher hotel pricing.
Mizuho's analysis led to an increase in their fiscal year 2027 EBITDA estimate by 15% to $6.8 billion. This adjustment places their projection 15% above the consensus among other analysts. The firm anticipates that Airbnb's potential for advertising monetization will contribute to this growth.
The revised price target of $200 is based on an 18.5 times multiple of the estimated EBITDA for fiscal year 2027. Mizuho's optimism reflects a belief in Airbnb's capacity to capitalize on its strategic initiatives and market opportunities in the coming years.
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