Airbnb's (ABNB) strong growth momentum and product initiatives could support further expansion in 2027, although its premium valuation may limit upside, BofA Securities said in a Friday note.

The company's Q3 growth was supported by platform improvements, all-in pricing benefits, international expansion, and reserve now, pay later growth to 40% of eligible gross booking value.

Looking ahead, broader pricing initiatives, including dynamic pricing, host-funded discounts, and hotel expansion on a bigger base could be incremental drivers for 2027.

BofA raised its Q4 estimates for gross booking value and revenue by 2% and 3%, respectively. Meanwhile, it lowered its EBITDA margin estimate to 28.2% from 28.7% on higher marketing and AI investments.

For 2027, the investment firm raised its revenue expectation by 2% and EBITDA expectation by 3%, with the margin expected to reach 36.4%, compared with 36.2% in 2026, despite continued growth investment.

BofA adjusted its price target to $205 from $195 and maintained its neutral rating on Airbnb.

The company's shares were up nearly 9% in early Friday trading.

Price: 184.66, Change: +14.53, Percent Change: +8.54