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Is the Travel Stock Rally Over?

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·3 min read
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  • BKNG
  • H
  • RCL

FAANG is done reporting earnings but the earnings deluge rolls on with over 1500 companies expected to report this week.

On this list are many of the hot travel companies which sold off big at the start of the pandemic, but which have now been among the biggest winners of the last year, even as they were missing on earnings.

Heck, some of them even became Reddit/WSB favorites like the cruise stocks.

Over the summer, however, as another coronavirus outbreak circles the globe thanks to the Delta variant, the travel stocks have weakened off their highs.

Most are now under performing the major indexes for this period.

Is this a buying opportunity or is the travel stock rally finally over?

5 Travel Companies Reporting Earnings This Week

1.    Marriott International MAR has beat big 3 quarters in a row. Shares have nearly retaken pre-pandemic highs but are now trading at 61x forward earnings. Those earnings are expected to rise 37% in 2022 as business and international travel returns. But is all the good news already priced in?

2.    Hyatt Hotels Corp. H has missed 4 quarters in a row but the shares still rallied off the pandemic lows in 2020. But in 2021, the shares have lagged. They are up just 4.7% year-to-date, well under the S&P 500 which has rallied 17%. Shares are actually down 5.4% in the last 3 months. Is this a buying opportunity?

3.    Booking Holdings BKNG has beat 3 out of the last 4 quarters. Shares busted out to new 5-year highs in the last year on the reopen optimism, but over the last 3 months, as the Delta variant has spread, shares have fallen 11.5%. Were investors too optimistic about the reopening?

4.    Royal Caribbean RCL has beat 2 quarters in a row. It has been one of the big winners of the Robinhood/Reddit traders as shares are up 57.8% over the last year. However, over the last 3 months, shares have cooled, falling 12%. With the vaccine continuing to roll out, is this a buying opportunity?

5.    Expedia Group Inc. EXPE has beat 2 out of the last 5 quarters, including last quarter. Shares were up 97% in the last year but they have weakened over the summer, falling 8.9% in the last 3 months. The company is expected to lose $0.37 this year but earnings are forecast to soar 1736% next year to $6.05. With that kind of earnings turnaround, is this a buying opportunity on the weakness?

[In full disclosure, Tracey owns shares of BKNG in her personal portfolio.]


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Marriott International, Inc. (MAR) : Free Stock Analysis Report
 
Hyatt Hotels Corporation (H) : Free Stock Analysis Report
 
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
 
Expedia Group, Inc. (EXPE) : Free Stock Analysis Report
 
Booking Holdings Inc. (BKNG) : Free Stock Analysis Report
 
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