By Priyamvada C
(Reuters) - Airbnb Inc shares jumped 12% in early trading on Wednesday, as investors cheered its bullish revenue forecast and tight control on costs in the face of mounting economic worries.
At least 10 brokerages raised their price targets on the stock after the vacation rental firm's fourth-quarter results beat market expectations.
Though Airbnb flagged pressures on average daily rates through the year due to higher bookings from less pricier urban areas and regions like Latin America, Atlantic Equities said overall travel demand should translate into strong financial performance.
The brokerage raised its price target to $130 from $115. The median Wall Street target is $136.
A strong U.S. dollar, flexible work arrangements and household savings have led to a travel boom, speeding up the industry's recovery from the pandemic.
Airbnb on Tuesday forecast first-quarter revenue between $1.75 billion and $1.82 billion, higher than analysts' average expectation of $1.69 billion.
Needham analysts raised their price target on the stock to $155 from $150 saying, "We like ABNB's positioning, as the company is ready to benefit from the reopening of the economy and pent-up demand for travel."
The rental firm said it expects to maintain last year's margin of 35% as some analysts do not see any problems from too many listings yet.
"Airbnb has tremendous wind at its back because both consumer and business travel continues to grow at a rapid rate from the post-pandemic recovery and remain strong," said Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners LLC.
Airbnb's results are also set to calm concerns that travel demand may be waning in the face of economic worries.
"ABNB's print appears to support our view that travel remains resilient despite a more mixed macro," analysts from Piper Sandler said.
Its shares were trading at $136.55. They had fallen nearly 50% in 2022.
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Shares of Tripadvisor Inc were up about 2% following the online travel booking firm's better-than-expected quarterly results after the bell on Wednesday.