Airbnb is overhauling its stagnated hospitality and rental businesses, priming its shares for a big bounce, according to Wells Fargo. The bank upgraded the short-term rental name to overweight from equal weight. It also raised its price target on shares to $178 from $136, implying 24.8% upside from Tuesday’s close. “Accelerating pace of innovation makes upside options a reality,” analyst Ken Gawrelski said Wednesday in a note to clients. “ABNB at a significant business inflection, in our view, emerging from 2 years of decelerating growth and compressing margins to accelerating growth and expanding margins ’26 -’28.” In early 2025, Airbnb CEO laid out his plan to make his firm into “one place to go for all your traveling and living needs.” Since then, Airbnb has aimed to add more hotel listings to its platform, in addition to integrating ride and excursion-booking services to turnaround its lagging stock, according to Wells Fargo. In addition, the firm has embraced artificial intelligence to transform its customer service and power property recommendations from its search engine. ABNB 1Y mountain ABNB 1yr Gawrelski expects all of those efforts to ramp up even more in the coming months, which should boost shares of Airbnb. “Expect more aggressive hotel supply acquisition and merchandising, sponsored listings, a loyalty program and improved conversion w/ AI search all driving estimates meaningfully above consensus,” Gawrelski wrote. The analyst added that Airbnb could also lean into building out a loyalty program for its customers to bolster its business. “Beyond those explicitly modeled drivers, we see material opportunity for…a loyalty program to drive cross-sell behavior and sustain bookings growth.” Wells Fargo’s call goes against consensus on Wall Street. Of the 43 analysts covering Airbnb, 21 have a hold rating on the stock, LSEG data shows. Shares have risen 5% in the year to date.
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Tuesday, August 25
