Are these the best travel stocks to invest in this week?
As the broader stock market searches for direction amid growing uncertainty about the economy, travel stocks appear to be thriving. This could be mainly due to an increase in consumer demand for leisure travel. Arguably, as countries and travel agencies better adapt to current endemic conditions, travelers would be more comfortable traveling again. Even in the face of rising air travel prices, some of the biggest 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 beat estimates at the top and bottom. Overall, Expedia raked in total revenue of $2.25 billion and posted a lower-than-expected loss of $0.47 per share. Year-over-year, the company’s gross bookings increased 58%. This was due to solid gains in its accommodation, airline and advertising/media businesses. In the words of Expedia CEO Peter Kern, “we continue to see positive indicators of a strong recovery in leisure travel this summer.”
At the same time, even hotel operators such as Hyatt Hotels (NYSE: H) work hard in the midst of it all. Just yesterday, the company launched its latest lifestyle brand, Hyatt Legend. Tastes that offer a dynamic hospitality experience, combining the comfort of high-end hotels with the adaptability of selected service properties. For now, Hyatt plans to expand the legend into major global leisure markets such as Shanghai, Tokyo and Saigon through 2025. Overall, things continue to heat up on the global travel scene. If all of this excites you about travel stocks, here are three to check out on the stock market today.
Travel actions to buy [Or Sell] Right now
Avis Budget Group Inc.
Starting today, we have Budget Reviews, a worldwide car rental company. In fact, it is one of the world’s leading providers of mobility solutions through its portfolio of brands and has over 10,000 rental locations. Its Zipcar brand is also a leading car-sharing network. Through it all, the company continues to reinvent the car rental experience, using data-driven intelligence and business digitization. CAR stock might be worth considering thanks to the company’s latest quarterly earnings report.
Taking a dip, the company says total revenue grew 77% year-over-year to $2.43 billion. Moreover, it was already higher than pre-pandemic levels. Net income for the quarter was $527 million and adjusted EBITDA was $810 million, the best first quarter adjusted EBITDA in its history. Additionally, the company ended the quarter with $550 million in cash and cash equivalents. “Despite Omicron’s impact on the first half of the quarter, our team was able to pivot quickly to handle the significant increase in demand in the second half of the quarter,” said Joe Ferraro, chief executive of Avis Budget Group. “We focused on diligent fleet management and continued cost optimization to generate new record adjusted EBITDA in the first quarter. I would like to thank all employees for their tireless and continuous efforts to help us reach this important milestone. »
The company’s board also approved a $1 billion and $2 billion increase to its existing share buyback authorization in March and May respectively. This brings its available clearance under the share buyback program to $2.3 billion. After a strong quarterly report today, are CAR stocks worth investing in?
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MGM Resorts International
Next on our list we have MGM Resorts, a global entertainment company with a portfolio of premier casinos and hotels. It also features state-of-the-art meeting and conference spaces, as well as live and theatrical entertainment experiences. Today, the company also released its first quarter financial statements and provided a business update.
First, the company reported revenue of $2.85 billion, up more than 70% year over year. The company says the strong performance this quarter was due to weekend demand and a better mix of its businesses. Besides, his mid-week activities are also improving with each quarter. He also completed the transaction with MGP at VICI and continues to seek a commercial gambling 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 confidence in the long-term recovery of its core business, it also continues to maximize long-term shareholder value. It has repurchased $2.8 billion in 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 funded from 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 build a large-scale, global online gaming business. All things considered, is MGM stock a buy?
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Last but not least, we will examine Hilton Hotels. Most are familiar with this leading name on the global hospitality scene today. Essentially, Hilton operates through a massive portfolio of 18 world-class brands. The likes of which span 6,900 properties, offering nearly 1.1 million rooms in 122 countries and territories around the world. According to company estimates, it has hosted more than 3 billion guests since it began operations more than a century ago. As such, it would make sense for investors to now consider HLT shares among their peers.
This could especially be the case, as Hilton released broadly strong results in its fiscal first quarter report earlier today. Overall, Hilton is looking for earnings of $0.72 per share on revenue of $1.72 billion. For reference, this compares to Wall Street estimates of $0.65 and $1.73 billion respectively. After considering all of this, Hilton was looking at a rather commendable quarter. Not to mention, the company is also resuming stock buybacks and declaring a quarterly dividend of $0.15 per share. This would represent an earlier than expected turn to return capital to shareholders, according to Hilton.
In detail, Hilton’s comparable revenue per available room also grew more than 80% year-over-year. To put it into perspective, that’s just 17% below 2019 levels. Speaking on all of this, CEO Christopher Nassetta. He notes that these results are due to the general strength of Hilton’s major segments “generating better-than-expected performance in March.With all of that in mind, would HLT stocks be on your list of the best travel stocks to buy right now?
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