Are These The Best Travel Stocks To Invest In This Week?
With the broader stock market seeking direction amidst growing uncertainty over the economy, travel stocks seem to be thriving. For the most part, this could be thanks to an uptick in leisure travel demand from consumers. Arguably, as countries and travel firms alike better adapt to the current endemic conditions, travelers would be more comfortable traveling again. Even in the face of rising air travel prices, some of the top names in the industry are seeing strong sales.
For example, we could look at the likes of Expedia Group (NASDAQ: EXPE). In its latest quarterly earnings update yesterday, the company topped estimates at the top and bottom lines. Overall, Expedia raked in a total revenue of $2.25 billion and posted a narrower-than-expected loss of $0.47 per share. Year-over-year, the company’s gross bookings are up by a solid 58%. This is thanks to solid gains across its lodging, air, and advertising/media businesses. In the words of Expedia CEO Peter Kern, “we continue to see positive indicators for a strong recovery in leisure travel this summer.”
At the same time, even hotel operators such as Hyatt Hotels (NYSE: H) are hard at work amidst all this. Just yesterday, the company launched its latest lifestyle brand, the Caption by Hyatt. The likes of which offer a dynamic hospitality experience, combining the comfort of upscale hotels with the adaptability of select-service properties. For now, Hyatt is planning to expand the Caption across key global leisure markets such as Shanghai, Tokyo, and Saigon through 2025. Across the board, things continue to heat up in the global travel scene now. Should all this have you keen on travel stocks, here are three to check out in the stock market today.
Travel Stocks To Buy [Or Sell] Right Now
- Avis Budget Group (NASDAQ: CAR)
- MGM Resorts International (NYSE: MGM)
- Hilton Hotels Corporation (NYSE: HLT)
Avis Budget Group Inc.
Starting us today, we have Avis Budget, a vehicle rental company with operations around the world. In fact, it is a leading global provider of mobility solutions through its portfolio of brands and has over 10,000 rental locations. Its Zipcar brand is a leading car-sharing network as well. Through all of this, the company continues to reinvent the car rental experience, using data-driven intelligence and company digitization. CAR stock could be worth considering thanks to the company’s latest quarterly earnings report.
Diving in, the company says that total revenue increased by 77% year-over-year to $2.43 billion. Furthermore, this was already higher than pre-pandemic levels. Net income for the quarter was $527 million and its adjusted EBITDA was $810 million, the best first-quarter adjusted EBITDA in its history. Also, the company ended the quarter with $550 million in cash and cash equivalents. “Despite the impact of Omicron on the first half of the quarter, our team was able to quickly pivot to manage the significantly increasing demand during the back half of the quarter,” said Joe Ferraro, Avis Budget Group Chief Executive Officer. “We focused on diligent fleet management and continued cost optimization to generate a new record first-quarter Adjusted EBITDA. I want to thank all the employees for their continued tireless efforts in helping us achieve this milestone.”
The company’s board of directors has also approved a $1 billion and $2 billion increase to its existing share repurchase authorization in March and May respectively. This brings its available authorization under the stock repurchase program to $2.3 billion. After a strong quarter reporting today, is CAR stock worth investing in?
MGM Resorts International
Next on our list, we have MGM Resorts, a global entertainment company with a portfolio of best-in-class casinos and hotels. It also has state-of-the-art meetings and conference spaces, along with live and theatrical entertainment experiences. Today, the company also reported its first-quarter financials and provided a business update.
Firstly, the company reported a revenue of $2.85 billion, up by over 70% year-over-year. The company says that this quarter’s strong performance is driven by weekend demand and a better mix of its business. Also, its midweek business is improving with each quarter as well. It also closed the transaction with MGP to VICI and continues to pursue a commercial gaming license in New York. Not only that, but MGM Resorts is also developing an integrated resort in Osaka, Japan. Given the company’s strong liquidity position and its confidence in the long-term recovery of its core business, it also continues to maximize long-term shareholder value. It repurchased $2.8 billion of shares of common stock since January 2021.
The company also announced an offer to acquire LeoVegas, a global online gaming company for a total of $607 million. The acquisition will be financed with existing cash and is expected to be accretive to MGM Resorts’ earnings and cash flow per share. The acquisition will provide MGM with a unique opportunity to create a scaled global online gaming business. All things considered, is MGM stock a buy?
[Read More] Top Stock Market News For Today May 3, 2022
Last but not least, we will be taking a look at Hilton Hotels. Most would be familiar with this leading name in the global hospitality scene today. In essence, Hilton operates via a massive portfolio of 18 world-class brands. The likes of which span 6,900 properties, offering nearly 1.1 million rooms across 122 countries and territories worldwide. By the company’s estimates, it has housed over 3 billion guests since beginning operations over a century ago. As such, it would make sense that investors are considering HLT stock amongst its travel stock peers now.
Notably, this could be the case as Hilton posted overall solid results in its first-fiscal quarter report earlier today. All in all, Hilton is looking at earnings of $0.72 per share on revenue of $1.72 billion. For reference, this is versus Wall Street estimates of $0.65 and $1.73 billion respectively. After considering all this, Hilton would be looking at a rather commendable quarter. Not to mention, the company is also resuming its share repurchases and declaring a $0.15 per share quarterly dividend. This would represent an earlier-than-expected turn towards returning capital to shareholders, according to Hilton.
In detail, Hilton’s comparable revenue per available room soared by over 80% year-over-year as well. To put things into perspective, this is just 17% shy of 2019 levels. Speaking on all this is CEO Christopher Nassetta. He notes that these results are thanks to broad-based strength across Hilton’s core segments “driving better than expected top-line performance in March.” With all this in mind, would HLT stock make your list of top travel stocks to buy right now?