The outlook for the future of the travel industry remains uncertain. The pandemic is yet to subside in the United States and internationally, making it doubtful whether the travel industry will witness a complete recovery in 2021. However, the industry has received some investor attention lately with the positive vaccine news dominating headlines. Arrival of effective coronavirus vaccines could help the industry rebound next year. But nothing is certain yet and…
people looking to invest in the travel industry need to be selective and careful.
Stocks like Booking Holdings, Inc. (BKNG) and Expedia Group, Inc. (EXPE) look more promising than their peers. These stocks have seen a significant recovery since the sharp drop that took place at the beginning of the pandemic. These stocks have an agency-based business model and any recovery in the travel industry would spell growth for them.
However, stocks like Carnival Corporation (CCL) and American Airlines Group, Inc. (AAL) have not performed as well since the mid-March crash. These stocks might continue to face difficulties in reviving their businesses.
Stocks to Buy:
Booking Holdings, Inc. (BKNG)
BKNG provides travel-related services through its online platform. The company has operations around the world. BKNG’s stock has gained 79% since hitting its low in mid-March.
The company has recently launched a new loyalty program called Priceline VIP to help frequent travelers save more money on their travels. The company also provided a number of custom deals and discounts for travelers on Black Friday.
For the third quarter ended September 2020, the company reported results that were better than expected despite significant challenges posed by the pandemic. The company’s revenue declined 47% while there was a 43% decline in bookings. However, the company remains poised to see a turnaround once the travel industry rebounds.
BKNG is estimated to see a revenue growth of 52.3% in 2021. The company’s EPS is expected to rise 3125% in 2021 and at a rate of 2.1% per annum over the next five years.
How does BKNG stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating
The stock is also ranked #3 out of 59 stocks in the Internet industry.
Expedia Group, Inc. (EXPE)
EXPE is an online travel agency that operates in the United States and internationally. The company helps users book tickets for travel, hotel accommodation, rental cars, and provides other travel related services. The company’s stock has gained 13.9% so far this year.
EXPE is working toward revamping its backend technology to improve their service offerings. The company is also going to use artificial intelligence and data analysis to provide better targeting of their services. The company has recently laid off employees to make their organization more cost-effective and efficient.
For the quarter ended September 30th, the company saw a fall in revenue of 58% compared to the same period last year. The company’s bookings also fell 68% during the same period. However, the company has…
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