The stock of Airbnb plummeted 8% in early Monday trade after a Piper Sandler analyst downgraded the company.
Airbnb was downgraded from overweight to neutral by analyst Thomas Champion, who lowered the price target to $169 from $215.
The analyst predicted the downgrade on excessive Street expectations, present valuation, and the fact that it is a pure-play focus, which may be less appealing when travel normalizes, according to a research note.
Investors were told by Champion that they were going to be successful "In January 2021, this brand was launched on ABNB with an Overweight rating in the hopes of gaining a near-term advantage with an alternative accommodation focus during the epidemic. We also believe that ABNB benefited from a longer-term structural move away from traditional hotels and toward alternatives."
While the business still sees ABNB as a "top-tier online travel asset and leader in alternative accommodations," it believes the company is overvalued in comparison to its peers.
In contrast to Champion's remarks, Jefferies analyst John Colantuoni initiated coverage of Airbnb with a buy recommendation on Friday.
According to Colantuoni, existing consensus estimates have room for improvement.