Piper Sandler on Monday downgraded shares of Airbnb , citing a return to a more normal travel environment. The firm lowered its rating on Airbnb to neutral from overweight. Piper Sandler also cut its price target on the stock to $169 from $215. The new projection implies an upside of just 1.8% from Friday's closing price. "ABNB's focus – long seen as an advantage – may prove less competitive in an environment where customers are interested in a diverse array of travel services that may include air, traditional lodging and other activities," Piper Sandler's Thomas Champion said in a note. The firm expects travel in the U.S. this year to look more like 2019 than the past two years. As such, Piper Sandler predicts consumers will book more traditional lodging and air travel accommodations. Airbnb may also struggle to beat its high revenue expectations on Wall Street, according to the firm. The company topped revenue estimates by 27% in the first quarter of 2021, but beat projections by just 3% in the third quarter. Plus, Piper Sandler thinks Airbnb shares are expensive at current levels compared with other stocks in the space. The firm said the stock "trades at a sizable premium to peers" when looking at enterprise value relative to projected sales for 2023. "ABNB remains a top-tier asset, but we believe the setup looks less favorable into '22," Champion said. Airbnb rose 13.4% in 2021, underperforming the S & P 500's nearly 27% gain. Shares of Airbnb are down 0.3% in 2022, and the stock dipped 3% in the premarket Monday. Meanwhile, Piper Sandler upgraded Expedia to overweight and raised its price target on the stock to $216 from $197, implying 20% upside from Friday's close. "In our view, EXPE offers the best risk reward for exposure to online travel in '22 given a strong expected US travel recovery and more sensitive rate environment in 2022," Champion said. —CNBC's Michael Bloom contributed reporting.
The Airbnb logo is seen on a little mini pyramid under the glass Pyramid of the Louvre museum in Paris, France, March 12, 2019.
Charles Platiau | Reuters
Piper Sandler on Monday downgraded shares of Airbnb, citing a return to a more normal travel environment.