These are the three best travel stocks to buy in May 2024, according to Wall Street analysts. The travel and tourism industry is booming in the post-pandemic era. Despite the macro uncertainty, people are spending on both domestic and international travel, which has a positive impact on travel stocks. Stock prices for airlines, hotels, ride-hailing companies, and cruise ships are expected to rise as appetite for travel increases.
Given the potential expansion of the global tourism industry, we looked at three stocks from various travel sectors that are backed by analysts and have solid growth potential. Let’s take a look.
#1 Carnival Corporation (NYSE:CCL)
Florida-based Carnival Corp. is in the midst of a travel resurgence, seeing strong demand for cruise travel. CCL operates approximately 91 cruise ships in North America, Europe, Australia and Asia through globally recognized brands such as AIDA, Carnival and Costa Cruises. Over the past year, CCL stock has gained 37.6%.
For the first quarter of FY24, Carnival posted a narrower-than-expected adjusted loss of $0.14 per share, but revenue of $5.41 billion matched Street expectations. CCL also raised its outlook for fiscal 2024, citing higher ticket prices, higher in-flight customer spending and higher occupancy.
However, the cruise liner warned that a recent bridge collapse in Baltimore would take a roughly $10 million hit to its 2024 revenue. In addition, CCL expects to incur costs of $130 million (until November 2024) related to rerouting due to the Red Sea dispute. CCL is focused on reducing debt and increasing financial leverage.
Is CCL a good stock to buy?
CCL stock has a consensus rating of 15 buys to 1 hold at TipRanks as a Strong Buy. Carnival Corp.’s average price target of $22.38 implies a potential upside of 53.3% from current levels.
2nd place Uber Technologies (NYSE:UBER)
Uber Technologies is a Transportation-as-a-Service (TaaS) provider. In addition to being known for its ride-hailing services, Uber also provides food and parcel delivery services, as well as freight transportation services around the world. The company’s first-ever $7 billion share buyback plan will provide a major boost to shareholders. Over the past year, UBER stock has risen 84.2%.
Uber is scheduled to announce its 2024 first-quarter financial results on May 8, before the market opens. TheStreet expects Uber to post diluted earnings per share of $0.22, compared with a loss of $0.08 in the year-ago quarter. Meanwhile, net sales consensus is pegged at $10.1 billion, reflecting a 14.5% increase compared to 1QFY23. Importantly, Uber expects his FY24 Q1 gross bookings to be $38.5 billion, up from his $37 billion.
Uber is focusing on cross-selling its services, which could reduce customer acquisition costs, drive further profit margin expansion, and increase market share. The company’s ride-sharing services are becoming more well-known around the world due to back-to-office mandates, while airport transfer services are also gaining momentum due to rising demand for air transportation.
Will Uber buy or sell?
At TipRanks, the UBER stock has a consensus rating of Strong Buy, backed by 35 buys and 1 hold rating. Uber Technologies’ average price target of $89.44 suggests a potential upside of 25.1% from current levels.
3rd place Delta Air Lines (NYSE:DAL)
Delta Air Lines is one of the four oldest U.S. airlines with worldwide operations. He transports more than 190 million travelers to more than 290 destinations on six continents, with up to 4,000 daily departures. DAL stock has risen 54.8% over the past year on a strong recovery in travel and expectations that business will return to pre-pandemic levels.
In the first quarter of 2024, Delta Air Lines significantly exceeded revenue and profit expectations. Operating revenue increased 8% year-on-year, supported by solid travel demand from corporate travel sales, improved domestic travel unit prices, and strong overseas travel. Meanwhile, Delta Air Lines’ focus on operational excellence resulted in better-than-expected profits. Delta Air Lines announced a quarterly dividend of $0.10 per share, reflecting a 0.6% yield.
In the second quarter, Delta expects growth to normalize and non-fuel unit costs to increase by approximately 2%. Accordingly, the company expects to post record revenue (up 5% to 7% year-over-year) in the second quarter, with mid-teens operating margins and earnings of $2.20 to $2.50 per share.
Is Delta Airlines a buy or sell?
With 16 unanimous buy ratings, DAL stock has a “Strong Buy” consensus rating at TipRanks. Delta Air Lines’ average price target of $58 means it has 9.6% upside potential from current levels.
end of thought
According to a survey by StatistaThe global travel and tourism industry is expected to generate $1.63 trillion in market revenue by 2028, growing at a CAGR (compound annual growth rate) of 3.47%. Global travel demand has not yet reached pre-pandemic levels, indicating significant growth potential in the coming years. Analysts are very optimistic about the three travel stocks mentioned above, expecting attractive share price gains over the next 12 months.
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