Solid progress on the vaccination front and the easing of COVID-19 restrictions allowed the travel industry to rebound slightly last year. Furthermore, AAA had predicted that 39.20 million people will travel 50 miles or more from…
home this Memorial Day weekend, marking an increase of 8.3% over 2021 and almost in line with the pre-pandemic levels.
Furthermore, a survey shows nearly three-quarters of Americans have made summer travel plans this year, a considerable increase from 53% in 2021. Investor’s interest in this space is evident from the ALPS Global Travel Beneficiaries ETF’s (JRNY) 6.9% returns over the past week. Revenue in the travel and tourism market is expected to grow at a 10.5% CAGR to $949.60 billion by 2026.
Given this backdrop, we think prominent travel and tourism stocks Expedia Group, Inc. (EXPE), InterContinental Hotels Group PLC (IHG), Travelzoo (TZOO), Travel + Leisure Co. (TNL), and Bluegreen Vacations Holding Corporation (BVH) are well-positioned to profit substantially this summer. So, it could be wise to bet on them now.
Expedia Group, Inc. (EXPE)
EXPE is a Seattle, Wash.-based international online travel company that operates through Retail; B2B; and trivago segments. The company offers a wide range of travel shopping and reservation services, advertising, and media services and provides real-time access to schedule, pricing, and availability information for airlines, hotels, and car rental companies.
On May 4, 2022, at its EXPLORE 22 annual partner event, EXPE debuted a three-tiered strategy to serve travelers and its partners and redefine its place in the industry. Expedia Group Open World, its new technology platform, leverages and configures products and services and accelerates and enhances the travel business. It introduced a reimagined marketplace that uses traveler reviews, customer service interactions, and more to reward each hotel property with a new guest experience score. It also introduced trip boards, smart shopping, and price tracking features to add confidence and trust to the travel shopping and booking experience. This should help EXPE gain wide recognition across the industry.
For its fiscal 2022 first quarter, ended March 31, 2022, EXPE’s revenue increased 80.5% year-over-year to $2.25 billion. The company’s adjusted EBITDA came in at $173 million, compared to a $58 million loss in the prior-year period. As of March 31, 2022, the company had $5.55 billion in cash and cash equivalents.
Analysts expect EXPE’s EPS to grow 342.4% year-over-year to $7.30 for its fiscal 2022, ending Dec. 31, 2022. It surpassed the Street’s EPS estimates in three of the trailing four quarters. The $11.78 billion consensus revenue estimate for the same fiscal year represents a 37% rise from the prior year. The company’s EPS is expected to grow at a 22.8% rate per annum over the next five years. Over the past week, the stock has gained 5.1% in price to close yesterday’s trading session at $130.97.
EXPE’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has a B grade for Growth, Value, and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for EXPE’s Momentum, Sentiment, and Stability here.
EXPE is ranked #4 of 69 stocks in the F-rated Internet industry.
Note that EXPE is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Growth portfolio. Learn more here.
InterContinental Hotels Group PLC (IHG)
Based in the U.K., IHG owns, manages, franchises, and leases hotels, resorts, restaurants, and spas under an established and diverse group of brands worldwide. The company manages hotel loyalty and priority club rewards programs. As of Dec. 31, 2021, the company operated 5,991 hotels and 880,327 rooms in approximately 100 countries.
On May 31, 2022, IHG signed a landmark three-hotel portfolio deal with ConBap Ecological Tourist Co. Ltd. in Hoi An, Vietnam–a UNESCO World Heritage Site. Expected to operate from 2024 onwards, IHG’s boutique lifestyle brand Hotel Indigo, premium hotel brand Crowne Plaza, and fastest-growing brand Holiday Inn Express will be located within a vibrant new mixed-use development, Hoian d’Or, and help the government’s plan to maintain it as one of…
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