travel stock outlook

Sectors  &  Industries Industrials Travel Services Best Travel Stocks to Buy Now (2024) Top travel stocks in 2024 ranked by overall Zen Score. See the best travel stocks to buy now, according to analyst forecasts for the travel services industry.

Travel stocks faq.

What are the best travel stocks to buy right now in Jun 2024?

1 . Airbnb ( NASDAQ : ABNB )

2 . tripcom group ( nasdaq : tcom ), 3 . norwegian cruise line holdings ( nyse : nclh ).

What are the travel stocks with highest dividends?

1 . Travel & Leisure Co ( NYSE : TNL )

2 . booking holdings ( nasdaq : bkng ).

Why are travel stocks down?

What are the most undervalued travel stocks?

1 . Tripcom Group ( NASDAQ : TCOM )

2 . royal caribbean cruises ( nyse : rcl ), 3 . travel & leisure co ( nyse : tnl ).

Are travel stocks a good buy now?

What is the average p/e ratio of the travel services industry?

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The Impact Investor | ESG Investing Blog

Investing for financial return is only part of the equation.

5 Best Travel Stocks to Buy Right Now

Updated on September 20, 2023

Our posts may contain links from our affiliate partners. This supports helps support the site as we donate 10% of all profits to sustainability organizations that align with our values. However, this does not influence our opinions or ratings. Please read our Terms and Conditions for more information.

The beauty of investing in the stock market lies in its capacity for growth and diversity. One compelling sector that should not be overlooked is the travel industry. It might seem surprising, considering current global uncertainties around travel and tourism, but you can find some of the best stocks there.

Now that we’ve finally stopped being in a bear market, many investors predict high growth potential in tourism stocks. Let’s delve into this unique sphere and see which stocks are the best. Remember, it is always good to be prepared when the stock market provides a window of opportunity.

Table of Contents

Best Travel And Tourism Stocks

1. booking holdings, 2. delta air lines, 3. southwest airlines, 4. expedia group, 5. carnival corporation, overview of the travel industry and travel stocks, what are travel stocks, what are some indicators of best-performing travel stocks, which online platforms can i use to keep track of travel stock performances, which travel stocks offer dividends, how much should i invest in travel stocks.

One player that stands out in travel stocks is Booking Holdings, a behemoth in the online travel industry. Their extensive portfolio encompasses several known travel brands, catering to the varying needs of travelers worldwide. If you’re looking for one of the best stocks to buy, it’s hard to go wrong here.

Booking Holdings operates several prominent brands, including Priceline, Agoda, Kayak, and OpenTable. Yet, the crown jewel of their operation is undoubtedly Booking.com . Boasting an impressive list of over 28 million accommodation listings in 43 languages, it’s clear why this platform is a go-to for many travelers.

The immense network of Booking Holdings isn’t limited to accommodations alone. They’ve smartly positioned themselves across various segments of the travel industry. Aimed to provide a comprehensive and hassle-free travel booking experience, they offer multiple services, from flights to car rentals to dining reservations.

The company’s connected trip strategy allows customers to book entire trips seamlessly – flights, hotels, sightseeing, and transportation at the destination. This holistic approach adds value for customers and creates additional revenue streams for Booking Holdings, helping maintain a strong cash flow.

Regarding financial health and growth potential, Booking Holdings ticks many boxes for growth and long-term investors. The company has shown resilience despite significant external pressures such as the COVID-19 pandemic.

First-quarter results show promising signs, with room nights and gross bookings reaching new highs catalyzed by the easing travel restrictions. Although their bottom line hasn’t completely recuperated to pre-pandemic levels, a strong performance of 158% year-over-year advancement in operating income proves their productive recovery path.

Prospects of the company’s share price seem promising for Booking Holdings. The current spending approach on marketing and sales personnel indicates a strategy focused on gaining more market share in the post-pandemic world of boosted travel demand. Analysts expect this investment to start producing operating leverage as early as 2024.

Booking Holdings offered multiple layers of value proposition, making it a compelling travel stock choice. The firm’s robust business model, coupled with effective strategies, points to a solid foreseeable future – a telltale sign that this could be a worthwhile addition to any portfolio.

Delta Air Lines, standing tall in the all-time list of leading travel stocks, promises significant value for many investors. It has been one of the best stocks to buy for years now. Known globally for its extensive international network and top-notch services, it has etched a distinct niche in the airline industry.

Delta’s progression through aggressive competition and the challenges of fluctuating prices of crude oil is a testament to its strong operational structure and proficient business model.

Overview of Delta Air Lines

There are a few reasons why Delta Air Lines emerged as the largest airline in the world in terms of total passengers carried and fleet size post its merger with Northwest Airlines. Its coverage spreads across six continents, facilitating travel to over 300 destinations in more than 50 countries.

Despite being hit hard by industry weakness during the pandemic, Delta took strategic steps toward recovery, further solidifying its market position and demonstrating impressive growth.

Delta’s uniqueness in the industry lies in its focus on prioritizing customer satisfaction alongside ensuring continual profitability. It is one of the few companies that offer considerable legroom even in the economy class, fortifying its reputation amongst frequent flyers.

Its innovative flyers’ rewards program, with promising offerings like exclusive access to Delta Sky Club and priority boarding privileges, has also considerably affirmed Delta’s customer-centric approach.

Profit Margins and Future Outlook

Delta’s impressive financial performance is evident from its balance sheet profit margins. For instance, they have consistently posted gross profit margins above 60%, indicating robust cost management measures to reduce expenses.

As tougher times fade away with an expected resurgence of air travel demand, it won’t be surprising if Delta secures even higher margins, growing rapidly in the coming fiscal year.

The future outlook for Delta also seems quite promising. The company adopted several initiatives to navigate the turbulent times of decreased global travel due to COVID-19. These initiatives included cost-reducing strategies like early retirement programs for employees with an aging population and fleet simplification, which restructured their operations to align with reduced passenger demand.

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Southwest Airlines is a major player in the aviation industry, recognized for its dedication to delivering exceptional service that transcends the norm. Its strong brand has seen it weather numerous economic ups and downs, keeping its engines running when many large companies were grounded.

Overview of Southwest Airlines

Its focus on domestic rides sets Southwest Airlines apart in the crowded skies. With over 4,000 daily local flights, it serves millions of customers annually across the United States with an extensive network that boasts 100 destinations.

As a result, it has become a prime choice for travelers seeking dependable and affordable transportation within US borders. Furthermore, its firm commitment to low-cost travel maintains its loyal customer base, as passengers are assured of premium service without premium prices.

Successful Strategies and Competitive Advantages

• Efficient Operations: The company operates at maximum efficiency, so turn-around times are some of the shortest in the industry, translating to more frequent flights and happy passengers.
• Innovation: Southwest breaches boundaries with innovative solutions like providing WiFi throughout flights, a feature still uncommon in all airlines.
• Customer Experience: Southwest prioritizes customer satisfaction, reflected in its policies and service offerings. Its two free checked bags policy, flexible change and cancellation policies make air travel convenient and stress-free for travelers.
• Strong HR: Their success can also be traced back to their deep emphasis on recruiting and retaining motivated employees. The airline is known for its friendly cabin crew, which adds to the overall positive customer experience.

In conclusion, with a strong branding game emphasizing efficient operations and excellent customer service, Southwest has created a niche in an industry known for its intense competition. It’s worth noting that while other airlines may offer similar services, Southwest stands out with its friendly approach embodied by every team member, making it one of the best tourism stocks to buy in today’s market.

Asserting strong control over costs while ensuring superior customer satisfaction, Southwest Airlines remains dominant in domestic aviation, and its annual earnings prove it. The airline maintains unparalleled efficiency as it navigates tough challenges and remains poised for recovery following any setbacks.

The Expedia Group has carved out its niche in online travel companies and now towers as a giant. Existing as an integral part of the tourism industry, Expedia Group offers an extensive array of travel products and services to both leisure and corporate travelers alike. This invariably positions it as a promising pick among travel stocks.

Overview of Expedia Group

Expedia Group commands an impressive set of brands under its umbrella, each catering distinctively to diverse aspects of travel demands. These include hotel chains like Hotels.com , Vrbo (Vacation Rentals by Owner), Orbitz, ebookers, and more.

They each function in unison to facilitate booking hotel rooms, airline seats, car rentals, and even destination services. Expedia Group has successfully embodied a one-stop solution for all travel needs with an expansive presence that spans mobile bookings, alternative distribution channels, private label businesses, and call centers.

But their commitment to enhancing the travel experience doesn’t end there. The company also manages advertising and media business alongside travel management—a testament to the comprehensiveness of its services.

Network Advantages and Expansion Into International Markets

Expedia Group has harnessed the power of a robust network replete with hotel properties and allied services—forming the backbone of this online travel leader. A continually expanding user base is lured by this potent mix of elements that team up to deliver a seamless, convenient online booking experience.

The international dimension is where Expedia’s resilience shines bright. Their geographical footprint is set to broaden further into the Asia-Pacific region, bolstering their market share, revenue growth, and dominance.

Moreover, stock investors have watched as they astutely diversified within the travel industry—encompassing vacation rentals, restaurant bookings, payments, flights, and experienced business sectors.

This ambitious outreach into various verticals with a commanding online presence in the tech sector propels Expedia Group onto a promising path as one of the best stocks to buy. At present and in time to come, it continues to be a compelling choice for long-term investors eyeing the best-performing travel stocks.

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Regarding travel stocks, Carnival Corporation stands tall as one of the prime contenders. With a dominant presence in the cruise line industry, the behemoth operator engages in fun and profit across the glistening blue oceans of the world.

Overview of Carnival Corporation

An established entity, Carnival Corporation , commands a mighty fleet consisting of premium brands like Holland America Line, Princess Cruises, Seabourn, and others. With its reach extending to Europe, Asia, and Australia’s vast marketplaces, this corporation has proven its mettle through longevity and resilience.

From engaging ventures at port destinations to private islands designed for optimal cruiser enjoyment, the corporation carries an impressive 47.4% of all cruise passengers while owning 39.4% of cruise industry real estate. Presenting a powerful performance in maritime tourism entertainment, it plays a central role in the global cruise line industry.

Financial challenges and potential for profitability in the future

Like many businesses in the tourism sector, Carnival Corporation faced mammoth challenges resulting from global circumstances that have unfolded since early 2020. The company’s share price tanked as operations abruptly stopped at the advent of the pandemic, along with everyone else in the same period.

Financial maneuvering and increased borrowing kept the corporation afloat during this tumultuous era. It has accrued $34 billion in long-term debt and drastically diluted its shares to weather the stormy period.

Despite these financial hardships, signs of recovery have surfaced on Carnival’s horizon. The company projected promising revenue growth for the second quarter of 2023—though profitability is still not anticipated, considering how the cash flow was impacted.

Recent motions within the company demonstrate steps toward potential sales growth in the future. Revenues have been gradually climbing in the past year, edging closer to pre-pandemic levels seen in early 2020. Additionally, management has undertaken fast-paced share buybacks over the recent quarter—an action typically interpreted as a positive signal by investors.

While Carnival Corporation still trades at an unusual share price-to-sales ratio indicative of reduced revenue relative to prior years, there’s significant potential for this travel stock moving forward. Long-term investors may see it as a cheaper opportunity for buying one of the best stocks.

The formula may be more complex than ever. Still, there’s no denying the robust building blocks Carnival Corporation possesses – if leveraged effectively, they could catapult it back to profitable grounds sooner rather than later.

A fascinating fact about the travel industry is its resilience. Yes, there were challenges during the onset of the global pandemic. However, history has shown that it rebounds quickly.

Interestingly, experts project that the travel industry is poised for a robust comeback. People have an insatiable need to explore and discover new sights, sounds, and experiences, which fuels this sector’s long-term resilience.

Investors poised to tap into this rebound can find enticing opportunities within travel stocks. Looking at projected growth rates and market indicators, this may be a good time to get into stocks trading.

According to the US Travel Association, about 26% of Americans plan to increase leisure travel expenditure within the next quarter. Furthermore, predictions from the International Civil Aviation Organization indicate an expected surge in passenger demand by 3% above pre-pandemic levels in 2023.

So clear skies for enthusiastic investors willing to venture into travel stocks. Travel companies with strong brand recognition, user-friendly online platforms, and a loyal customer base are key considerations for most investors. They include giants such as Booking Holdings Inc., Southwest Airlines Co., etc.

Booking Holdings is among one of the largest online travel portals. Their admirable rebound in revenue amidst pandemic uncertainties highlights their impressive business prowess. That makes it one of the best stocks to buy right now.

Southwest Airlines is another promising stock. Their stability during economic downturns and consistently satisfactory customer service have positioned them as a strong contender for a growth stock.

As for investors who prefer asset-light models, Airbnb offers an irresistible pull. Homeowners can list their abode for adventurous travelers searching for authentic experiences away from mainstream hotels. Given the emerging trend of remote work and extended-stay bookings, Airbnb is well-placed to ride this wave.

Remember, there is opportunity in every market sector if you know where to look. As world economies gradually recover from recent setbacks, it would be proactive for investors to consider travel stocks keenly.

See Related: How to Invest in Stocks: A Comprehensive Guide

These are shareholdings in companies within the travel and tourism industry inside the stock market. They include airlines, hotels, cruise lines, and online booking firms. Since this market relies heavily on consumer spending and disposable income, it can be highly cyclical.

Strong balance sheets, low debt-to-equity ratios, positive cash flow, and advantageous stock prices compared to earnings indicate robust travel stocks worth considering.

Online platforms such as Yahoo Finance or Bloomberg are excellent resources for tracking stock performance. Consider subscribing to financial newsletters or joining investor forums for expert investment perspectives.

Some larger corporations with established profitability could offer dividends as returns to shareholders. Search for dividend aristocrats or kings in the industry with a history of consistent dividend payments for decades.

The amount you wish to invest is subjective based on your financial objectives and risk appetite. However, diversification is crucial in investment portfolios; therefore, investing entirely in one industry or specific company could expose you to more risk.

To make informed decisions when investing in travel stocks, do your due diligence: Research extensively on companies you are interested in, factor in your risk tolerance level and investment goals, and consult a trusted financial advisor if needed. Remember that all investments come with risks; performance isn’t guaranteed.

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Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen.

Hailing from a lineage of industrious Midwestern entrepreneurs and creatives, his business instincts are deeply ingrained. This background fuels his entrepreneurial spirit and underpins his commitment to responsible investment. As the Founder and Owner of The Impact Investor, Kyle fervently advocates for increased awareness of ethically invested funds, empowering individuals to make judicious investment decisions.

Striving to marry financial prudence with positive societal impact, Kyle imparts practical strategies for saving and investing, underlined by a robust ethos of conscientious capitalism. His ambition transcends personal gain, aiming instead to spark transformative global change through the power of responsible investment.

When not immersed in the world of finance, he’s continually captivated by the cultural richness of new cities, relishing the opportunity to learn from diverse societies. This passion for travel is eloquently documented on his site, ViaTravelers.com, where you can delve into his unique experiences via his author profile.

7 Travel Stocks to Buy as COVID Cases Retreat

After living through two years of a pandemic, consumers are ready to hit the open road – and these top-rated travel stocks could reap the rewards.

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Americans and their global counterparts are getting ready to enjoy a more open world in 2022 – good news for travel stocks.

According to the Centers for Disease Control and Prevention, the seven-day average of COVID-19 cases in the U.S. is at its lowest level since last summer.

"After more than a year of waiting, travel stocks may finally be recovering," says David Russell, vice president of Market Intelligence at online trading platform TradeStation. "The reason for the growth in the industry is credited primarily to the decreasing COVID-19 cases due to vaccines developed in late 2020. Consumers are eager to travel again, which has cued investors to begin to reaccumulate travel stocks, bolstering the market."

Additionally, in its 2022 outlook, Expedia Group, in collaboration with Wakefield Research, surveyed 5,500 individuals from across the globe – including the U.S., U.K. and Canada. Of those surveyed, 81% said they plan to take at least one vacation with family and friends over the first half of 2022. And more than half of respondents said they will spend more on travel than they did pre-pandemic.

"Travel is about to experience a year unlike ever before as people plan purpose-driven trips, value vacation time more, and up their investment in unique experiences," says Ariane Gorin, president of Expedia for Business.

With that in mind, here are seven travel stocks that will benefit from consumers' pent-up demand for vacation. This list covers a variety of travel-related industries, including hotel stocks , airlines and entertainment. But all the names featured here have at least one thing in common: They are top-rated among Wall Street pros.

The 15 Best Stocks to Buy for the Rest of 2022

Data is as of April 3. Analysts' opinions courtesy of S&P Global Market Intelligence. Stocks are listed by analysts' consensus recommendation, from lowest to highest.

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Marriott International

• Industry: Lodging
• Market value: $56.8 billion
• Analysts' consensus recommendation: 2.41 (Buy)

Marriott International ( MAR , $173.68) was busy adding to and building its worldwide pipeline of hotel rooms over the past year. In 2021, the operator of 30 hotel and lodging brands signed 599 agreements to build 92,000 future rooms, more than half outside the U.S. and Canada.

With 2021's signings, Marriott now has 495,000 rooms under development worldwide. That adds to its existing footprint of 1.48 million rooms at almost 8,000 properties in 139 countries. Despite hurdles faced by the pandemic, MAR was able to open an additional 86,000 rooms last year, 3.9% higher than in 2020.

Marriott has three key growth areas: Luxury travel, leisure travel and branded residential.

Of the three, luxury appears ready to take off in 2022. Marriott is set to launch more than 30 luxury hotels this year under its St. Regis, W Hotels, Ritz-Carlton, JW Marriott and more to meet the demand. In total, the company has seven luxury brands associated with 476 hotels.

The luxury segment provides the company with higher fees than its moderate banners. For this reason, it has almost 50,000 hotel rooms in its luxury pipeline.

In 2021, Marriott's revenue per available room (RevPAR) in its U.S. and Canadian luxury hotels was $190.53, nearly double what it was in 2020. In addition, the average daily rate at these hotels was $393.72, 12.9% higher year-over-year.

Overall, Marriott had gross fee revenues of $2.7 billion for all of 2021, 60% higher than the year earlier. These improvements translated into an adjusted net income of $1.1 billion, a considerable improvement over the $267 million loss it incurred in 2020.

While COVID-19 variants may do their best to slow reopenings, the writing is on the wall. And travel stocks like MAR will benefit in 2022 from a return to a more normal hospitality industry.

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• Industry: Travel services
• Market value: $111.3 billion
• Analysts' consensus recommendation: 2.39 (Buy)

Airbnb ( ABNB , $173.07) CEO Brian Chesky announced on Twitter in mid-January that he would be working remotely in Atlanta and other cities throughout 2022 to better understand the Live Anywhere trend that's exploding worldwide. So, each week he's working in a town away from ABNB's home office in San Francisco and living on Airbnb.

In Chesky's tweet, he noted several statistics driving the Live Anywhere phenomenon, including the fact that between July and September of last year, 20% of gross nights booked were for stays of 28 days or longer. And more than 100,000 people booked stays of at least three months in the 12 months through September.

People aren't just staying in big cities or resort towns, they're also staying in rural areas. According to Airbnb, in Q3 2021, domestic nights booked by U.S. guests for rural stays increased 85% over Q3 2019.

The digital nomad visa has become a thing too. So you want to work in Croatia, it's no problem. There are now approximately 41 countries offering this new type of visa.

Naturally, Chesky is very optimistic about his company's future – and for good reason. In 2021, ABNB brought in $47 billion in gross bookings volume (GBV), nearly double what it did in 2020 and 23% higher than in 2019. Additionally, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin in the previous fiscal year was 27%, compared to an adjusted EBITDA margin of -5% in 2019.

And ABNB ended last year with $8.3 billion in cash, cash equivalents, marketable securities and restricted cash, while holding $3.7 billion in funds on behalf of guests.

The company admitted in its Q4 shareholder report that it's "challenging" to give guidance too far out due to COVID-19-related uncertainties. Still, Airbnb says it is "encouraged" by what it's seeing for 2022 travel trends, including lead times for first-quarter bookings in the U.S. and Europe exceeding those seen in Q1 2019.

Based on a price-to-sales ratio of 13.1x its 2022 estimate, its valuation is the cheapest it's been since going public in December 2020.

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Royal Caribbean Cruises

• Market value: $21.3 billion

Cruise operators were arguably among the hardest-hit travel stocks during the pandemic. Case in point: Royal Caribbean Cruises ( RCL , $83.66). The company has $11 billion in revenue in 2019. In 2020, that figure had tumbled to $2.2 billion, and fell even further – to $1.5 billion – in 2021.

But analysts' expectations are for a big recovery over the next two years. Consensus estimates are for fiscal 2022 revenue to hit $9.3 billion, and rise to $12.6 billion in 2023.

"We view cruise lines as one of the few remaining recovery stories in consumer, offering high operating leverage that should become a tailwind into 2023 as business returns to normal," says Wells Fargo analyst Daniel Politzer.

While the analyst believes near-term performance hinges on progress toward resuming operations as well as volatility sparked by geopolitical risks and rising fuel prices, "the bull thesis remains intact for cruise penetration to grow over time, with North America the most mature market." Politzer has an Outperform rating on RCL, which is the equivalent of Buy.

Royal Caribbean is upbeat about its future too. While CEO Jason Liberty – who took the reins from long-time leader Richard Fain in early January – said the omicron variant " was particularly unfortunate for the first half of 2022 bookings and will likely delay our return to profitability by a few months," it will not impact RCL's overall recovery.

Liberty also says he expects 2022 will be "a strong transitional year."

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Hertz Global Holdings

• Industry: Rental & leasing services
• Market value: $9.1 billion
• Analysts' consensus recommendation: 2.00 (Buy)

Heading into the new year, Barron's said it expects rental car companies to be among the best travel stocks in 2022 due to ongoing vehicle shortages that have created a higher-pricing environment. The financial publication tapped Hertz Global Holdings ( HTZ , $21.12) as a top stock pick.

Many on Wall Street share in this optimism. Of the nine analysts following the stock tracked by S&P Global Market Intelligence, three say it's a Strong Buy, three call it a Buy and three have it at Hold. What's more, HTZ was a top stock pick among billionaire investors in the fourth quarter.

"Hertz is an industry leader in the rental vehicle market," says Oppenheimer analyst Ian Zaffino (Outperform). "It has a strong balance sheet, a significantly optimized cost structure, and impressive partnerships with Uber ( UBER ), Tesla ( TSLA ) and Carvana ( CVNA )."

In HTZ's most recent earnings report, the company reported higher-than-expected fourth-quarter adjusted EBITDA of $628 million and revenues of $1.9 billion. The company also said it ended 2021 with $3.2 billion in liquidity – a figure that includes $2.3 billion in unrestricted cash, a solid position to fund strategic initiatives.

Deutsche Bank analyst Chris Woronka (Buy) says this "cash windfall will likely accelerate in 2022," which "should drive large buybacks."

Pretty impressive considering the company only emerged from Chapter 11 bankruptcy protection in June 2021 after filing for it in May 2020.

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Ryman Hospitality Properties

• Industry: REIT – hotel & motel
• Market value: $5.2 billion

Ryman Hospitality Properties ( RHP , $94.35) is one of those travel stocks that fly under the radar of many investors. This is because it's partly a hotel owner and operator and partly a hospitality business. But most importantly, it's a Nashville-based real estate investment trust (REIT) .

Its most famous assets include the Grand Ole Opry and Ryman Auditorium, but it has many other revenue-generating properties held within its two operating segments: Hospitality and entertainment.

In addition to the two properties mentioned above, the entertainment segment includes a growing list of country brands, including Ole Red – a bar, restaurant and performing arts venue backed by singer Blake Shelton. The hospitality segment is made up of Gaylor resorts across Tennessee, Florida, Texas, Maryland and Colorado.

The REIT's overall revenues grew 79.1% in fiscal 2021 to $939.4 million. Revenue in its more significant hospitality segment spiked 68.8% year-over-year to $786.6 million.

Analysts expect strong revenue growth in fiscal 2022, with the consensus estimate at $1.6 billion – a 65.7% YoY improvement. The company is also projected to report earnings of $1.58 per share, a marked improvement over the $3.21 per-share loss it recorded in 2021.

Helping Ryman along are expansion plans, with the REIT opening a 5,000 to 6,000 square feet Ole Red location at the Nashville International Airport in the year ahead. Then, in 2023, it plans to open one in Las Vegas, its first location in the Western U.S. This one will be big, at four stories and roughly 27,000 square feet. Ryman plans to spend $30 million developing the building and Ole Red location.

It also hopes to grow the Block 21 mixed-use entertainment complex it acquired in October for $260 million. The Block 21 complex in Austin, Texas, includes a 251-room W Hotel and the Austin City Limits concert venue.

For investors looking for the best travel stocks, Ryman Hospitality Properties is an absolute diamond in the rough.

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Delta Air Lines

• Industry: Airlines
• Market value: $25.2 billion
• Analysts' consensus recommendation: 1.58 (Buy)

There's no denying that it has been a tough couple of years for Delta Air Lines ( DAL , $39.31).

While the spread of COVID-19 kept passengers from flying early in the pandemic, the omicron variant kept the airline from fielding enough staff in late 2021 and early 2022. According to The New York Times , more than 8,000 Delta employees called in sick in the last weeks of 2021, forcing the company to cancel thousands of flights.

The good news for Delta shareholders is that the impact from omicron was short-lived.

"Omicron is expected to temporarily delay the demand recovery 60 days, but as we look past the peak, we are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel," CEO Ed Bastian said in Delta's Q4 2021 press release.

And yes, it's true, the airline's financial results in 2021 were grim. Revenues on an adjusted basis were down 43% from 2019 to $26.7 billion. On the bottom line, its adjusted loss was $2.6 billion, down significantly from the $4.8 billion profit it reported two years ago.

Still, Delta generated $1.3 billion in free cash flow – the money remaining after a company has paid its expenses, interest on debt, taxes and long-term investments needed to grow its business – in 2021. While that is below the $4.2 billion it had in 2019, the fact that it was positive in such a tough business environment speaks to Bastian and his team's work last year keeping the business afloat.

And analysts expect DAL to swing to a profit of $1.49 per share in 2022, while bringing in revenues of $43.4 billion – both significant improvements over its results in 2021.

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Walt Disney

• Industry: Entertainment
• Market value: $249.4 billion
• Analysts' consensus recommendation: 1.79 (Buy)

Long-time Walt Disney ( DIS , $137.00) shareholders have taken it on the chin in recent years. According to Morningstar, you have to go back 15 years for the company to deliver a higher annualized total return (10.31%) than the entire U.S. market (10.28%). Every other time frame, Disney underperforms.

The pandemic certainly didn't help.

In the fiscal year ended Oct. 2, 2021, Disney's revenues grew 3% over 2020 to $67.4 billion, while its segment operating income fell 4% YoY to $7.8 billion. On the free cash flow front, it generated $2.0 billion, 45% less than a year earlier.

So, why is DIS on a list of the best travel stocks?

For starters, its Disney Parks, Experiences and Products segment performed admirably despite COVID-19 affecting its first-half performance. On the top line, it had $16.6 billion in revenue, 3% less than a year earlier. However, its operating income was $471 million, 4% higher than in 2020.

Another piece of the puzzle for DIS – and an important one at that – is Disney+. In 2021, Disney grew its video-streaming direct-to-consumer (DTC) revenue by 55% to $16.3 billion. This accounted for 32% of Disney's Media and Entertainment Distribution revenues. That's 10% higher than in 2020.

Disney finished its fiscal year with 179 million DTC subscribers, including for Disney+, Hulu and ESPN+. Disney+ took the lion's share of subscribers, up 60% YoY to 118.1 million. Over the next two years, Disney will expand its streaming service into more than 50 new markets worldwide, including South Africa and Croatia.

Wellington-Altus Private Wealth portfolio manager Rick Stuchberry believes the Dow Jones stock is anything but dead. He's made it one of his top picks for 2022.

"People look at it and say 'Oh gee, well everything's going wrong at Disney,' but it isn't," Stuchberry said. "The market's taken it down. The streaming business looks pretty good, but the theme parks, they're not running it where they should be because of the COVID thing, but once the COVID passes? You're getting movie libraries, you're getting the whole package and Disney at a very good price now," the Cantech Letter reported.

If that's not enough, the highest-rated travel stock on this list hasn't been this cheap since 2019 based on its price-to-sales ratio of 3.7x.

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Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.

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7 Best Cruise Stocks to Buy Now

It's been smooth sailing for cruise stocks so far this year, thanks to tailwinds from strong travel demand.

Getty Images

Cruise stock investors stand to benefit immensely if shares return to their pre-pandemic levels.

Many cruise stocks have rewarded investors year to date thanks to booming travel demand. After gloomy performances during the pandemic, cruise stocks look poised to deliver gains for investors.

Battered comps from slow travel make it easier for cruise stocks to achieve triple-digit year-over-year revenue growth. And some cruise companies have already reported that type of growth.

Do Cruise Stocks Present an Opportunity?

Many cruise stocks still have not reached their pre-pandemic prices. Carnival Corp. & PLC (ticker: CCL ), one of the best cruise stocks to buy now, is well removed from its pre-pandemic per-share range of high $40s to low $50s.

John Engle, president of Almington Capital, indicates that cruise stocks can continue to ride the momentum from current trends. "In the short term, cruise stocks may enjoy some tailwinds thanks to upbeat expectations about the summer vacation season," Engle says. "After years of struggles in the face of a global pandemic and macroeconomic uncertainty, cruise operators have been bouncing back."

Cruise stock investors stand to benefit immensely if shares return to their pre-pandemic levels. Some of these cruise stocks distributed quarterly dividend payments leading up to 2020, hiking the dividend each year.

Meanwhile, the airline industry has experienced a strong recovery as well. Delta Air Lines Inc. ( DAL ) raised its full-year outlook and reinstated its dividend. American Airlines Group Inc. ( AAL ) has also flipped back to profitability and is experiencing strong top-line growth.

The success of airlines and cruises demonstrates that more people want to travel with restrictions lifted.

Cruise Stock Risks to Keep in Mind

Although cruise stocks have delivered strong year-to-date returns and have made significant progress, the travel sector carries some risk. Some stocks are riskier than others, but Engle says some risks specifically apply to cruise stocks.

"The biggest risk for cruise stocks is sustainable profitability," says Engle. "Many cruise operators are carrying an awful lot of debt, and it is not clear whether they will be able to service it over the long run. Thin profit margins and high debt should always be a cause for concern for investors looking at cyclical industries . Even a mild recession could be enough to devastate cruise operators' bottom lines."

Cruise stocks can continue their run as long as travel demand stays strong. However, any slowdowns can hurt cruise companies that carry significant debt. Cruise stock investors should carefully monitor travel demand to gauge the risk of their investments.

Investors seeking exposure to heightened travel demand may want to consider these seven top cruise stocks:

Carnival Corp. & PLC ( CCL )

Carnival shares have more than doubled year to date as more travelers return to cruises. The company reported $4.9 billion in revenue in the second quarter, more than doubling its growth year over year. It is also the highest quarterly revenue number the corporation has ever reported. Total customer deposits also reached an all-time high of $7.2 billion, eclipsing the previous record of $6 billion in May 2019.

Carnival also reported a better-than-expected net loss of $407 million. Previous guidance suggested a second-quarter net loss between $425 million and $525 million. In a press release, Carnival CEO Josh Weinstein expressed confidence in the company's ability to continue its progress.

"With bookings and customer deposits hitting all-time highs, we are clearly gaining momentum on an upward trajectory."

Royal Caribbean Cruises Ltd. ( RCL )

Royal Caribbean shares have also doubled year to date, and the company is almost back to profitability. The company reported $2.9 billion in revenue and a $47.9 million net loss (19 cents per share) in the first quarter. Full-year guidance calls for adjusted earnings per share in the range of $4.40 to $4.80 per share.

A return to profitability can mean a dividend isn't too far away. While management said there is no plan to declare or pay dividends in the near future, a return to payouts in 2024 or 2025 would be a welcome development for investors.

Prior to the pandemic, Royal Caribbean had been a reliable dividend growth stock since 2011. During that time span, the annual dividend jumped from $0.40 per share to $3.12 per share.

Royal Caribbean CEO Jason Liberty remains optimistic that the rising trend of cruises will hold its ground.

"Leisure travel continues to strengthen as consumer spend further shifts toward experiences," Liberty said in a May 4 press release. "Demand for our brands is outpacing broader travel due to a strong rebound and an attractive value proposition."

Raised guidance also indicates the confidence leadership has in the underlying business.

Norwegian Cruise Line Holdings Ltd. ( NCLH )

NCLH stock hasn't doubled like the other cruise stocks, but it has still outperformed the market with a nearly 70% year-to-date gain. The company reported $1.8 billion in revenue for the quarter ended March 31, which represents 249% year-over-year growth. Its annual revenue as of March 31 was $6.1 billion, a 426.5% increase year over year. Norwegian had a quarterly net loss of $159.3 million, or 38 cents per share.

Norwegian met or exceeded guidance on all key metrics in the first quarter. The company believes it can achieve a full-year adjusted EPS of 75 cents, an increase from its prior estimate of 70 cents. The company is going through a CEO transition, with Frank Del Rio passing the helm to Harry Sommer at the end of June. In his last press release as CEO, Del Rio informed shareholders that the company is "solidly positioned for 2023 and beyond" and has completed its post-pandemic operational recovery.

Lindblad Expeditions Holdings Inc. ( LIND )

Lindblad Expeditions is a smaller cruise stock, with a $558 million market cap that has rewarded shareholders with a 35.6% year-to-date return as of July 17. The company reported $143.4 million in revenue in the first quarter, representing a 167% revenue increase from Q1 2019 and a 111% revenue increase from Q1 2022.

The company has growing occupancy rates and reported a quarterly net income of $621,000. That is a significant improvement from last year's net loss of $41.7 million in Q1 2022.

Leadership remains confident in the booming demand for cruise travel, setting full-year tour revenue guidance at $550 million to $575 million and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA , at $70 million to $80 million. The company has also planned a $35 million stock repurchase program.

Agilysys Inc. ( AGYS )

Agilysys provides software for the hospitality industry, giving it some exposure to cruise lines. The company also serves other sectors, such as hotels, resorts, stadiums and higher education.

Agilysys reported 21.8% year-over-year revenue growth to a record $198 million in fiscal year 2023, which ended on March 31. The company also reported $14.6 million in net income, more than doubling its growth from FY 2022. A healthy 60% of the company's total revenue is recurring, which makes it more feasible for the company to maintain profit margins.

Agilysys hasn't soared like pure-play cruise stocks. In fact, the stock is down roughly 14.3% year to date as of July 17. However, AGYS shares are up more than 300% over the past five years.

OneSpaWorld Holdings Ltd. ( OSW )

OneSpaWorld Holdings provides spas, wellness and treatments on cruises and on land. Shares have jumped 28% year to date as the rising demand for cruise travel means more demand for OneSpaWorld's services.

The company reported $182.5 million in total revenues in Q1 2023. That's more than double the amount of revenue that the company generated in Q1 2022. Leonard Fluxman, OneSpaWorld's CEO, indicated back in May that second-quarter results were already looking promising.

"Our second quarter 2023 performance is off to a positive start, and we expect our favorable momentum to continue to build throughout the year," Fluxman said.

World Kinect Corp. ( WKC )

World Kinect Corp., formerly known as World Fuel Services Corp., is an energy, commodities and services company. The corporation sells more than 50 fuel products and has delivered over 18 billion gallons of fuel.

Cruise ships that need fuel to cover vast distances turn to companies like World Kinect. The return of travel helped the company generate about $59 billion in revenue in 2022.

Revenue growth decelerated in 2023, and the company also reported a 13% year-over-year decline in net income in the first quarter. Aviation and marine segments both experienced double-digit year-over-year gains in gross income, though.

Ira Birns, chief financial officer of World Kinect, emphasized the company's solid numbers in a Q1 press release: "Our balance sheet remains strong, providing significant liquidity to drive growth and continued investment in products and services that will further support our strategic priorities."

Should You Get On Board with Cruise Stocks?

Many cruise stocks have outpaced the stock market and rewarded investors in 2023. Significant travel growth has helped cruise lines hit revenue records and get closer to profitability. Many of these same stocks also offered dividends and reliably paid them for several years before the pandemic.

However, cruise stocks have their risks. The gains may become muted in future years as year-over-year comps become more challenging. Investors should also monitor how cruise lines cover their long-term debt and track whether the demand for travel remains this elevated.

5 of the Best Travel Stocks to Buy

Wayne Duggan June 14, 2023

Tags: Norwegian Cruise Line , Royal Caribbean Cruises , Cruises , investing , money , Carnival Corp. , Travel , Airlines , Delta Airlines , American Airlines

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Americans are itching to travel again, after two years of COVID, lockdowns, semi-lockdowns and masking mandates have discouraged, if not outright stopped, seeing the world. While many travel stocks bounced off their pandemic-era lows, the actual businesses have yet to follow suit.

Some companies are still mired in the pandemic’s fallout : consumers with little money, supply chains that remain snarled, lingering fears of the virus itself and the highest inflation in 40 years .

Besides those core issues, there’s always the potential for more fallout from a new wave of COVID or an escalation of international conflicts. With many travel stocks off their recent highs – and plenty that have never fully recovered – is it a good time for investors to find value here? Or should investors wade more cautiously into the sector?

Are travel stocks a good bet for a rebound in 2022?

Travel is one of the most sensitive areas of the economy. When money gets tight, it’s one of the easiest areas for consumers to cut back on, making it a highly cyclical industry. If consumers get anxious about the economy, inflation or any number of other things, travel can be quickly cut.

So after two years of sluggish activity in the travel sector, is 2022 the year that it finally bounces back? While many travel stocks are off their lows, they’re still well below their levels of 2019.

“As COVID-related restrictions continue to ease, travel stocks will be free from the impact these had on both their business and their stock prices,” says Julie Gillespie, head of TipRanks TV. “There is renewed optimism for future travel, with plenty of pent-up travel demand in store.”

“Travel stocks rebounded to recent highs during the recovery of the last year, yes, but historic highs occurred prior to the pandemic, and for many brands, there is room to double and still not reach those share prices,” says James Ferrara, president and co-founder of InteleTravel, a travel advisory firm.

But the emergence of the rapidly spreading Omicron variant of COVID and now global events such as the Russia-Ukraine conflict, with its potential to escalate, have given some travelers pause. And with consumers feeling the bite of inflation – now at its highest level in decades – it may not seem like travel companies are poised to do particularly well going forward.

Inflation is hitting areas that are particularly important for the travel industry: food, fuel and labor. Labor costs have been a notable factor, rising markedly as many companies seem unable to find workers, at least at prices they’re willing to pay. And oil prices now sit at multi-year highs, hitting industries such as airlines and cruise lines hard, though it also hurts the prices of other goods and services. Food prices are hit by both these factors, particularly restaurant food.

However, it’s important to remember that the stock market typically looks out six to nine months. It’s pricing events into stocks based on how they might be impacted by emerging events. That means low stock prices today might quickly turn if a few conditions conspire to get travel booming again. It’s certainly clear that at the end of the day consumers still want to travel.

And the travel sector didn’t just sit on its thumbs the last two years after travel stocks were knocked off their strong upward trend. Top companies used the downturn to get lean and mean, and profits could rebound strongly when demand returns in full force.

“The best companies took the last two years to trim expenses, develop technology and hone their brands,” says Ferrara. “They can be even better positioned to resume that trend in the coming year, if not escalate it.”

Despite ongoing worries of the pandemic and international conflict, which could hamper short-term results, “if you look further out, this could be a buying opportunity,” says Anthony Denier, CEO of trading platform Webull .

Ferrara seems to agree: “A travel surge is imminent this year and into 2023, which will amplify the pre-pandemic growth trends and industry outlook for the rest of the decade.”

And he doesn’t see inflation rearing its head too much in the travel industry yet. “More influential is the pent-up demand and unspent travel dollars of the last two years,” Ferrara says.

5 things to watch in travel stocks

Here are five areas to be aware of if you’re looking at travel stocks as a potential investing opportunity.

1. Not all travel stocks are the same

Dynamics in the marketplace differ from sub-sector to sub-sector. While airlines, hotels and online booking sites might all be part of the travel economy, they each respond in different ways to the events playing out. That might be oil prices, travel restrictions or international conflict.

It’s critical to remember that the travel sector consists of many different business models. If Americans are staying in the U.S. to travel, domestic hotels might do quite well while airlines that rely heavily on transatlantic flights to generate their profits may fare quite poorly.

The swings in demand, whether it’s consumers or governments driving the decisions, can have nasty effects. Many sub-sectors of the travel industry are not well-suited to these swings. Airlines have to run their routes whether the planes are full or empty, while hotels have to support high fixed costs to keep their properties orderly whether guests show up or not.

If you’re investing in individual stocks, make sure to understand the dynamics at play in that sub-sector, since not all travel stocks are the same. For example, while Delta Air Lines and Carnival sit well below their 2019 peaks, booking site Expedia recently powered to new highs.

2. Look to luxury

Those with the most disposable income tend to be the first to start spending it, especially on highly discretionary purchases such as travel . So, companies that tend to cater more to the affluent may see business rebound in a way that’s faster and more resilient than other kinds of companies.

“Across the industry, we’re seeing that luxury travelers are one cohort leading the travel industry’s recovery,” says Colin Smyth, vice president and general manager of travel at Flywire, a payments firm for the travel industry. “In recent earnings calls, executives from Wynn Resorts and Marriott point to their premium travelers and high-end properties as top performers.”

Smyth points to a Flywire report that revealed that 72 percent of luxury travelers will drop more money on vacations in 2022 than they did before the pandemic began.

Investors interested in travel stocks may consider investing in companies exposed to these wealthy consumers, who may spend on a more sustained basis even if further roadblocks arise.

3. Shifting loyalties

With some of their traditional vacation spots off-limits, consumers may have developed new tastes, and that could potentially lead to longer-term shifts in demand.

Ferrara points to the cruise industry, where there’s been “a dramatic market share shift to land-based vacations, particularly all-inclusive resorts in the Caribbean and Mexico. Cruise sales declined as much as 80 percent in 2020 and 2021, while vacation package sales doubled.”

“The cruise industry will be fully operational this summer – essentially all ships, all ports,” says Ferrara. “But millions of customers have experienced new resorts and destinations, and there will be new loyalty from that.”

Ferrara highlights non-hotel lodging companies such as AirBnB as potential winners in this shift as consumers looked for private accommodation during the pandemic. “As a result, the rate of growth and market share in this vertical has been boosted for the long term now,” he says.

Identifying companies that can take advantage of these shifting loyalties could be a good way to spot a future winning investment.

4. Geopolitical conflict

Escalating tensions around the world, notably the Russia-Ukraine conflict, have the potential to shake the travel industry, both directly and indirectly.

“Geopolitical tensions are very high and certainly weighing on the markets, and dampening enthusiasm for European travel,” says Gillespie. “This will be a hindrance to travel stocks that have a large presence in the European markets.”

Global conflict dents would-be travelers’ confidence, but it can also raise the price of oil, which has now soared to more than $100 per barrel. That price rise has knock-on effects throughout the economy, raising prices everywhere and reducing consumers’ disposable income. Further escalations or even a new conflict could rapidly hurt the travel industry.

But David Sadkin, president of Bel Air Investment Advisors in Los Angeles, thinks the investing climate will be a more prominent factor in stocks’ returns: “ Fed interest rate policy is likely to be far more influential on the financial markets than geopolitical events.”

5. Stocks that have yet to fully recover

If you’re looking for potential upside, one place is to search for underperforming stocks where the earnings power of the underlying companies is poised to rebound.

Ferrara likes the cruise industry, which includes companies such as Carnival, Royal Caribbean and Norwegian Cruise Line Holdings.

“The fundamentals are there: many new ships are being launched, demand is strong with extraordinarily high satisfaction and repeat bookings, and the value and quality of the product are very high,” he says. “Stock prices do not yet reflect this.”

Other travel stocks have already seen stronger performance over the last year and may be less attractive.

“Looking at hotel-related companies, some companies such as Marriott International, Hilton Worldwide, and Hyatt Hotels have seen very positive growth so far in 2022, leaving smaller upside potential,” says Gillespie.

However, even if demand does return, a company’s profitability may still be challenged by rising costs. Companies that have pared back costs might find that they’re paying their existing staff more and may need to hire more, while fighting rising costs elsewhere, such as fuel. In such cases, profits are likely to return, but may not return to where they were, at least for a while.

Bottom line

With consumers just aching to start vacationing again, it seems like the travel industry is poised to rebound, though a number of other factors such as new COVID variants might slow that roll. Still, some parts of the travel industry may have yet to price in a recovery, and so could be attractive investment opportunities. But it’s worth remembering that it takes substantial work and analysis to pick the winning investments from the losers.

If you’re not comfortable doing that, it’s easy to turn to broad-based index funds and ride the growth in the entire economy, without having to find the winners.

Learn more:

• How to invest in stocks: A step-by-step guide for beginners
• The pros and cons of travel credit cards
• 5 best investments to hedge against inflation

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.

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Travel + leisure co. (tnl).

• Previous Close 43.86
• Bid 44.75 x 800
• Ask 44.79 x 800
• Day's Range 43.89 - 45.15
• 52 Week Range 32.10 - 49.02
• Volume 975,181
• Avg. Volume 575,938
• Market Cap (intraday) 3.205B
• Beta (5Y Monthly) 1.65
• PE Ratio (TTM) 8.45
• EPS (TTM) 5.32
• Earnings Date Jul 24, 2024
• Forward Dividend & Yield 2.00 (4.45%)
• Ex-Dividend Date Jun 14, 2024
• 1y Target Est 54.00

Travel + Leisure Co. Overview Travel Services / Consumer Cyclical

Travel + Leisure Co., together with its subsidiaries, provides hospitality services and travel products in the United States and internationally. The company operates in two segments, Vacation Ownership; and Travel and Membership. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers, as well as provides consumer financing in connection with the sale of VOIs; and property management services at resorts. The Travel and Membership segment operates various travel businesses, including three vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment also offers private-label travel booking technology solutions. The company was formerly known as Wyndham Destinations, Inc. and changed its name to Travel + Leisure Co. in February 2021. Travel + Leisure Co. was founded in 1990 and is headquartered in Orlando, Florida.

Full Time Employees

December 31

Fiscal Year Ends

Travel Services

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Performance overview: tnl.

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CCL Earnings: Carnival Stock Gains on Strong Q2 Results

June 26, 2024 — 12:41 am EDT

Written by Radhika Saraogi for TipRanks  ->

Shares of Carnival Corp. ( NYSE:CCL ) gained about 9% in yesterday’s trading session after the company reported strong results in the second quarter of Fiscal 2024. The company benefited from higher onboard spending by cruise passengers and a rise in ticket prices. Buoyed by strong Q2 results and upbeat travel demand, Carnival raised its full-year guidance.

Carnival is a global cruise company that operates a portfolio of brands (for a thorough assessment of CCL stock, go to  TipRanks’ Stock Analysis page ).

CCL: Q2 Highlights

Carnival posted  adjusted earnings of $0.11 per share , which beat the consensus estimate of a loss of $0.01. Further, it compared favorably with a loss of $0.31 in the year-ago quarter. Similarly, the company’s  revenue jumped about 18% year-over-year to $5.8 billion  and exceeded the Street’s estimate of $5.68 billion. 

The improved results were driven by strong travel demand and increased ticket pricing for CCL, with total customer deposits reaching a record $8.3 billion. Furthermore, cruise costs per available lower berth day (ALBD) increased by 4% year-over-year, much slower than the prior quarter’s 7.9%.

Fiscal Q3 and 2024 Outlook

For the fiscal third quarter, the company expects adjusted EPS of $1.15, versus the analysts’ expectations of $1.11 per share. Also, CCL anticipates that capacity will grow by 6.2% year-over-year.

For the full Fiscal year 2024, Carnival significantly raised its adjusted EPS outlook to $1.18 from the prior guidance of $0.98 per share.

Analysts Weigh In

Following the release of Q2 earnings, three analysts rated CCL stock a Buy. Among the bullish analysts, Daniel Politzer from Wells Fargo ( WFC ) raised the price target on Carnival stock to $24 (34.7% upside potential) from $23.

Another analyst, Matthew Boss from J.P. Morgan ( JPM ), raised the price target to $23 (29.1% upside) from $21.

Is CCL a Good Stock to Buy Now?

Currently, Carnival has a Strong Buy consensus rating based on 14 Buy, one Hold, and one Sell recommendations. The  analysts’ average price target on CCL stock  of $21.63 per share implies 21.38% upside potential. Shares of the company have gained 4.6% over the past six months .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Nike stocks see their biggest drop since 2001 amid weak fiscal outlook

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Nike Inc. shares sank after the sneaker company’s full-year outlook missed expectations, stoking investor concerns about waning demand and competition from upstarts On and Hoka, as well as rival Adidas.

The world’s largest sportswear company sees revenue declining in the mid-single digits in the company’s current fiscal year, which began this month. Analysts had expected growth of about 2% this year, according to estimates compiled by Bloomberg.

The shares fell as much as 18% on Friday morning — Nike’s biggest fall since 2001 — wiping out billions in market value. The stock had already declined 17% over the last 12 months.

Other athletic retailers including JD Sports Fashion and Puma were dragged down. Adidas gained early Friday in Frankfurt, Germany, but the stock later erased the gain.

After years of dominance, Nike is struggling to churn out hot-selling footwear to replace top sellers such as Air Force 1 and Dunk sneakers. The worsening performance raises the pressure on senior leaders.

Chief Executive John Donahoe has resorted to layoffs and other belt-tightening measures after a move to prioritize Nike’s own sales channels failed to produce the promised levels of profits and growth.

In recent years, the company also curtailed its reliance on retail partners, which in turn have begun pushing rival brands. The wave of competition from newer brands such as On Holding and Deckers Outdoor Corp.’s Hoka pushed Nike to vow to prioritize sports, new products and wholesale partners.

The trajectory contrasts with that of Adidas, whose new chief executive, Bjorn Gulden, has embraced retail partners again and sped up the introduction of new products like the retro Samba sneaker, which has become a hit and fueled a new era of growth. He’s also sharpened the company’s focus on athletic performance.

Nike’s revenue in the fourth quarter fell 1.7% to $12.6 billion, missing the average of analyst estimates. A notable laggard was the Converse subsidiary, known for its Chuck Taylor sneakers, where revenue plummeted 18% due to soft sales in both North America and Western Europe.

Donahoe took over Nike in January 2020, following many years leading tech companies including ServiceNow Inc. and EBay. Before that, he had spent nearly two decades at the management consulting firm Bain & Company Inc., where in 1999 he became chief executive.

Some analysts have criticized Donahoe’s leadership approach. Sam Poser of Williams Trading said recently that Nike’s current senior executives lack the “instinct and experience that the prior team had.”

That’s left Nike in a “push model” situation, Poser said, whereby a company has to convince consumers to buy its products rather than the opposite scenario, where people are struggling to get their hands on the brand’s shoes and apparel.

It’s a marked difference from what Nike was experiencing for much of the past decade, during which it has basically doubled revenue from $25 billion in 2013 to more than $50 billion today. While annual sales dipped during the onset of the COVID-19 pandemic in 2020, the growth has otherwise been remarkable until recent quarters.

Now, Nike leaders are asking for patience as the company looks to accelerate the release of new franchises in the fitness and lifestyle categories in the second half of this fiscal year and then bring on more new products over the next couple of years.

“A comeback at this scale takes time,” Chief Financial Officer Matt Friend said during the company’s call with analysts. But he cautioned that shifting the product lineup will erode sales in the short term.

Nike executives blamed the slowdown in part on lifestyle brands, including Air Force 1 and Nike Dunks. The category’s sales fell for the first time since the start of the pandemic, when demand for casual attire took off.

The issues could prompt double-digit downgrades to analysts’ earnings expectations for the company during this year and next, according to analyst James Grzinic of Jefferies. Moreover, the era of European shoe companies’ stock reactions tracking Nike’s is breaking down.

Adidas is now the “preferred sporting brand for global investors” as Nike and Lululemon Athletica Inc. lose momentum, Grzinic said in a note.

Weakness in Nike’s own sales channels is also a “reason for concern, as the activewear giant could be turning its core shoppers away due to lack of newness,” said Bloomberg Intelligence analyst Poonam Goyal.

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Stock market today: Indexes rise as traders cheer cooler PCE inflation

• US stocks rose Friday as traders took in new inflation data from the Fed's preferred price gauge.
• PCE inflation cooled to 2.6% last month, the lowest pace of price growth in three years.
• Investors are feeling bullish about rate cuts by the end of the year, the CME FedWatch tool shows.

US stocks jumped on Friday as traders took in fresh inflation data, which showed price pressures continuing to cool off in May.

Major indexes ticked higher, while bond yields slipped. The 10-year Treasury yield dipped two basis points to 4.265%.

The personal consumption expenditures price index, the Federal Reserve's preferred measure of inflation, eased to 2.6% in May, its lowest reading in three years. The figure was in line with what economists expected and slightly lower than the 2.7% growth recorded last month, fueling investor optimism for rate cuts.

"The lack of surprise in today's PCE number is a relief and will be welcomed by the Fed," Seema Shah, the chief global strategist at Principal Asset Management, said in a statement. "However, the policy path is not yet certain. A further deceleration in inflation, ideally coupled with additional evidence of labour market softening, will be necessary to pave the way for a first rate cut in September."

Investors expect the Fed to hold interest rates steady at the July policy meeting but are bullish on rate cuts by the end of 2024. Markets see a 66% chance the Fed will cut rates twice by December, according to the CME FedWatch tool .

The stock market is on track to close out a strong first half of the year, with the S&P 500 up 15% year-to-date and the Nasdaq up nearly 20%. Still, some concerns about the breadth of the rally have formed, especially in recent days as tech stalwarts like Nvidia have wavered.

The chip firm's volatile few weeks, which saw $430 billion in market cap erased in a few days before the stock recovered, have sowed some doubt about the prospects of the AI-fueled rally continuing in the second half of 2024.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:

• S&P 500 : 5,487.30, up 0.08%
• Dow Jones Industrial Average : 39,225.28, up 0.16% (+61.22 points)

Nasdaq composite : 17,869.15, up 0.06%

Here's what else is going on today:

• LVMH boss Bernard Arnault raised his job's retirement age to 80. But that limit is too low, according to Warren Buffett.
• Stocks could soon see a 10% correction amid stagflation and the risks of no Fed rate cuts in the second half, according to one Stifel strategist.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil ticked higher 0.2% to $81.85 a barrel. Brent crude , the international benchmark, rose 0.2% to $85.57 a barrel.
• Gold jumped 0.5% to $2,348 per ounce.
• The 10-year Treasury yield slipped two basis points to 4.265%.
• Bitcoin dipped 0.5% to $ 61,388.72 .

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