5 Travel Stocks To Add To Your May 2022 Watchlist
As demand for spring and summer travel remains high, travel stocks could be worth keeping tabs on in the stock market. Despite the higher flight ticket prices, travelers appear to be shrugging off the increased costs from rising inflation. After all, who couldn’t use a vacation after being stuck at home for so long? According to the U.S. Travel Association, travel spending reached $83 billion in February 2022, just 6% below pre-pandemic levels. As such, there could still be room for a bigger rebound.
Take United Airlines (NASDAQ: UAL) for instance. For its second quarter, United is expecting the highest quarterly sales in its history, with revenue per passenger mile up 17% over 2019. In addition to that, it is also forecasting a 10% operating margin. Next, we also have Delta Air Lines (NYSE: DAL). Notably, Delta expects a return to profit this quarter thanks to a jump in bookings and fares. Its forecasts suggest that second-quarter capacity will be at 84% of 2019 levels. With these airlines feeling bullish on their prospects, here are five of the best travel stocks to watch in the stock market today.
Travel Stocks To Buy [Or Sell] Right Now
- JetBlue Airways (NASDAQ: JBLU)
- Expedia Group Inc. (NASDAQ: EXPE)
- Booking Holdings Inc. (NASDAQ: BKNG)
- American Airlines Group Inc. (NASDAQ: AAL)
- Trip.com Group Ltd. (NASDAQ: TCOM)
Starting us off is the low-cost airline company, JetBlue. The company operates over 1,000 flights daily and serves 100 domestic and international network destinations. These destinations span the U.S., Mexico, the Caribbean, Central America, South America, and Europe. Additionally, JetBlue’s differentiated product combined with its competitive cost structure enables JetBlue to compete effectively in high-value geographies. Earlier this week, JetBlue reported its earnings for the first quarter of 2022.
Jumping in, the company brought in $1.73 billion in revenue. For comparison, this is 7.2% short of the pre-pandemic revenues in 2019. Nonetheless, revenue more or less matched the figures analysts were expecting. As for its earnings, JetBlue reported a narrower-than-expected loss of $0.79 per share for the quarter. Despite all this, the company sees a strong acceleration in demand. “We delivered positive year-over-three revenue growth in the month of March as we exited the quarter with tremendous revenue momentum driven by very strong underlying travel demand across all of our core segments,” said Robin Hayes, JetBlue’s CEO. As the low-cost airline gets back on its feet, will you be watching JBLU stock?
Following that is Expedia, an online travel shopping company that serves consumers and small businesses in the travel industry. Through its wide array of websites, consumers have access to Expedia’s travel fare aggregators and travel metasearch engines. As countries around the world start to reopen their borders to welcome travelers, I could see why investors may be keen on investing in EXPE stock. Yesterday, Expedia and Qtech Software, a travel tech software provider, announced an expanded collaboration.
Namely, the collaboration aims to provide access to Expedia’s travel supply to travel business globally through OTRAMS GO, Qtech’s flagship platform. Prior to this collaboration, smaller travel businesses were forced to integrate inventories from wholesalers. This ate into their margins and restricted its range of hotel offerings to customers. However, through OTRAMS GO, travel businesses of all sizes will now have greater access to premium hotel content and technology. All in all, this will help generate growth, higher revenue, and improve efficiency in the travel ecosystem. Given this expanded collaboration, should you invest in EXPE stock?
Booking Holdings (BKNG) is the world’s leading provider of online travel and related services. The company renders its services to consumers and local partners in more than 200 countries and territories through its notable brands. These include the likes of Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK, and OpenTable. In 2019, consumers booked 845 million room nights of accommodation, 77 million rental car days, and 7 million airplane tickets using its websites.
In a note issued to investors on Monday, Jefferies (NYSE: JEF) lifted its first-quarter 2022 earnings per share estimates for BKNG. Analyst J. Colantuoni now forecasts that the BKNG will post earnings per share of $0.75 for the quarter, up from its prior forecast of $0.73. Jefferies also retains its Buy rating and has a $2,900 price target on BKNG stock. BKNG will also be reporting its first-quarter 2022 financial results on Wednesday next week. As such, will you be eyeing BKNG stock?
Another top travel stock to watch is American Airlines. In short, the company is a leading name in the global air travel industry. On average, it operates nearly 6,700 daily flights to almost 350 destinations across 50 countries. On top of that, American is a founding member of the Oneworld alliance, whose members serve more than 1,000 destinations with flights to over 150 countries. Last Thursday, American reported its first-quarter 2022 financial results.
For starters, the airline brought in a revenue of $8.9 billion. This represents an impressive recovery to 84% of the revenue generated in the same period in 2019. Looking ahead, the American expects second-quarter capacity to be approximately 92% to 94% of its second-quarter 2019 figures. In fact, March has been the first month since the pandemic where its revenues surpassed 2019 levels. Bookings since then have continued to rise. Besides that, the company also expects total revenue to be 6% to 8% higher than the second quarter of 2019. As American continues its fight in returning to profitability, should you add AAL stock to your watchlist?
Finally, we have Trip.com, a leading online travel company that serves as a one-stop travel platform. It integrates a comprehensive suite of travel products and services and differentiated travel content. Impressively, it is currently one of the largest online travel agencies in China and also one of the largest travel service providers in the world. In March, the company reported its full-year financials for the fiscal year 2021.
For starters, net revenue for the year came in at $3.1 billion, representing a 9% increase in year-over-year revenue. Besides that, accommodation reservation revenue was $1.3 billion, up by 14% from 2020. This accounts for 41% of total revenue, a rather sizable chunk. In the past year, the company has been focusing on expanding its product offerings and improving its content capabilities. All of which will pave the way for its growth in the long term. Moving forward, Trip.com will continue to focus on its recovery in the Chinese domestic market while remaining ambitious on its vision towards global travel reopening. Given the positive outlook, should you buy TCOM stock?