Investing.com — Morgan Stanley downgraded to “equal-weight” from “overweight” and cut its price target to €8 from €10.40, citing increased uncertainty around growth in the second half of the year and a weaker near-term outlook.
The brokerage said the downgrade follows a more challenging operating backdrop, particularly linked to disruption in Middle East travel markets and evolving commercial dynamics within the business.
It noted that while first-quarter bookings showed re-acceleration, underlying revenue growth lagged due to pressure on take rates.
HBX reported total transaction value (TTV) growth of 16% in constant currency to €2 billion in the first quarter, driven in part by increased use of third-party supply and promotional activity. However, the take rate declined by 90 basis points to 8.4%, resulting in revenue growth of 5% in constant currency.
Morgan Stanley said this dynamic “highlighting the active trade off HBX is making between TTV growth and take rates.”
For the second quarter, the brokerage forecast TTV growth of about 7% year-on-year, or roughly 11% in constant currency, with total revenue expected to rise only 1% in constant currency. It said it is 2% below consensus on TTV and 3% below on revenue for the quarter.
The analysts pointed to exposure to the Middle East as a key risk, noting the region accounted for about 24% of TTV and 22% of revenue in the first quarter, with roughly half linked to the Middle East. Hotel performance in the region has declined sharply, with some markets seeing revenue per available room fall 50-60%.
Morgan Stanley said it expects TTV in directly affected regions to be down about 50% in the last month of the quarter, contributing to slower growth.
The brokerage also flagged risks to full-year guidance, stating it sees “increased risk to the FY26 guidance” amid limited visibility and continued disruption.
It cut its FY26 TTV growth forecast to about 12% in constant currency from 14%, and revenue growth to around 0.5% from 2.1%.
Management had said second-quarter trading had started well, with January booking momentum continuing and a “satisfactory” level of bookings secured, but also cautioned that it was “too early to assume a 1Q-like run-rate continued.”
Morgan Stanley said that despite the stock trading at about 6.6x CY26 adjusted P/E, it sees “no clear catalyst for a rerating” given uncertainty in global travel and increased execution risks tied to a shift toward third-party sourcing.
