“The industry is going to recover but this recovery is not going to be linear.” This is what D.A. Davidson’s Senior Analyst, Tom White, has to say about the probable future that awaits the travel stocks. “We think exiting 2021– we’re close to more normalize levels but probably still a bit below the 4th quarter of 2019.” said Tom in an interview with CNBC.
Tom thinks that Airbnb (ABNB) is the safest stock to own within the travel stocks. He rated Airbnb with a ‘buy‘ and a marked a take-profit area at its $172 zone, with an implied upside of 21% as of writing. According to him, Airbnb is their ‘favorite idea’ in the online travel space. “We think they got exposure in all the right places when it comes to leisure travel in particular which we think is going to come back more robustly than corporate travels.”. Tom also added that Airbnb has got the ‘most unique’ and varied accommodation inventory that speaks to the broadest number of potential traveler used cases.
“We’re generally positive on both Booking (NASDAQ: BKNG) and Expedia (NASDAQ: EXPE). We’ve got a neutral rating but they are both great companies.”. He said that the visibility in Booking and Expedia over the next three quarters is a ‘little bit less’ than what they see with Airbnb. According to Tom, Airbnb has proven over the last quarter that its business is more resilient and more adaptive despite being pressured by the pandemic.
Talking about the ridesharing company Lyft (LYFT), “It’s one of those names that really has not benefitted from the pandemic at all.” Tom mentioned that a lot of people haven’t even opened their Lyft App since the pandemic started, but he concluded by leaving a good note, “In some ways, we view this as one of the purest examples of North America or U.S. centric reopening. Lyft rides are very much closely tied to our daily lives and I think that’s going to snap back quite quickly.”.