Airbnb, Carvana, Vroom downgraded as Baird assesses recession risks
stockcam

As consumers pull back on discretionary purchases, particularly for big ticket items, Baird moved to downgrade Airbnb (NASDAQ:ABNB), Carvana (NYSE:CVNA), and Vroom (NASDAQ:VRM).
âAs part of our ongoing process to evaluate recession scenarios, we are downgrading several covered stocks to reflect company-specific and broader macro concerns,â equity analyst Colin Sebastian commented. âThese include companies meaningfully exposed to discretionary "high ticket" purchases and potentially out-sized impacts from an environment of escalating jobless claims â a dynamic we've already witnessed with e-commerce in UK/Europe.â
As such, Airbnb (ABNB) -2.78%, Carvana (CVNA) -3.9%, and Vroom (VRM) -5.3% each had their prior Buy ratings shifted downward to Neutral. 
For Airbnb (ABNB), Sebastian said that travel spend during an expected recession is likely to decline in a meaningful way. The companyâs premium valuation does not reflect this potential, in his view. Sebastian reduced his price target to $100 from a prior $120 alongside the downgrade to Neutral. 
Vroom (VRM), meanwhile, was cut to Neutral on profitability concerns with its price target trimmed to $2 from a prior $3. 
âWe recognize the company continues to make progress in right-sizing operations and focusing on unit profitability, but longer-term secular growth opportunities are clearly overshadowed in the face of recession and ongoing inflation,â Sebastian explained. â We could see returning to a more positive rating in scenarios of macro improvements, successful completion of the restructuring plan, and/or higher e-commerce unit sales volumes at improved levels of unit economics.â
Read more on his similar rationale outlined in the downgrade of Carvana.