5 travel stocks to add to your May 2022 watchlist
As spring and summer travel demand remains high, travel stocks could be worth keeping an eye on in the stock market. Despite higher airfare prices, travelers seem to be unaware of rising costs due to rising inflation. After all, who doesn’t need a vacation after being stuck at home for so long? According to the US Travel Association, travel spending reached $83 billion in February 2022, just 6% below pre-pandemic levels. As such, there could still be room for a bigger bounce.
To take United Airlines (NASDAQ: UAL) for example. For its second quarter, United expects the highest quarterly sales in its history, with revenue per passenger-mile up 17% from 2019. On top of that, it also expects an operating margin of 10%. Then we also have Delta Airlines (NYSE: DAL). Notably, Delta expects a return to profit this quarter on the back of increased bookings and fares. Its forecast suggests second-quarter capacity will be at 84% of 2019 levels. With these airlines optimistic about their outlook, here are five of the best travel stocks to watch in the stock market today.
Travel actions to buy [Or Sell] Right now
Our departure is the low cost airline, JetBlue. The company operates more than 1,000 flights daily and serves 100 domestic and international network destinations. These destinations cover the United States, Mexico, the Caribbean, Central America, South America and Europe. Additionally, JetBlue’s differentiated product combined with its competitive cost structure enables JetBlue to be competitive in high value geographies. Earlier this week, JetBlue announced its results for the first quarter of 2022.
Jumping in, the company made $1.73 billion in revenue. For comparison, that’s 7.2% lower than pre-pandemic revenue in 2019. Still, the revenue more or less matches the numbers analysts expected. As for its earnings, JetBlue reported a weaker-than-expected loss of $0.79 per share for the quarter. Despite all this, the company is seeing a strong acceleration in demand. “We delivered positive three-year revenue growth in the month of March as we ended the quarter with tremendous revenue momentum driven by very strong underlying travel demand across all of our core segments,” said Robin Hayes, CEO of JetBlue. As the low-cost airline gets back on its feet, will you be watching JBLU stock?
[Read More] Stock market today: Dow Jones, S&P 500 climbs; Meta Exceeds Expectations with Strong Revenues
after it is Expedia, an online travel agency that serves consumers and small businesses in the travel industry. Through its wide array of websites, consumers have access to Expedia’s travel fare aggregators and meta travel search engines. As countries around the world begin to reopen their borders to welcome travelers, I can understand why investors may be keen to invest in EXPE shares. Yesterday, Expedia and Qtech Software, a provider of travel technology software, announced an expanded collaboration.
Namely, the collaboration aims to provide access to Expedia’s travel offering to travel companies worldwide through OTRAMS GO, Qtech’s flagship platform. Prior to this collaboration, small travel companies were forced to integrate wholesaler inventory. This was eating into their margins and restricting its range of hotel offerings to customers. However, with OTRAMS GO, travel businesses of all sizes will now have better access to premium hotel content and technology. Overall, this will help drive growth, higher revenue, and improve the efficiency of the travel ecosystem. Given this expanded collaboration, should you invest in EXPE shares?
Reserve credits (BKNG) is the world’s leading provider of online travel and related services. The company serves consumers and local partners in more than 200 countries and territories through its notable brands. These include Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable. In 2019, consumers booked 845 million accommodation nights, 77 million car rental days and 7 million airline tickets using its websites.
In a note released Monday to investors, Jefferies (NYSE: JEF) raised its first quarter 2022 earnings per share estimate for BKNG. Analyst J. Colantuoni now expects BKNG to post earnings per share of $0.75 for the quarter, up from its previous forecast of $0.73. Jefferies also maintains its buy rating and has a price target of $2,900 on BKNG shares. BKNG will also release its first quarter 2022 financial results on Wednesday next week. As such, will you be watching BKNG stocks?
[Read More] Top 5 auto stocks for your late April 2022 watchlist
Another travel stock to watch is American airlines. In short, the company is a leading name in the global airline industry. On average, it operates nearly 6,700 daily flights to nearly 350 destinations in 50 countries. In addition to this, American is a founding member of the Oneworld alliance, whose members serve over 1,000 destinations with flights to over 150 countries. Last Thursday, American released its first quarter 2022 financial results.
For starters, the airline made $8.9 billion in revenue. This represents an impressive recovery to 84% of revenue generated during the same period in 2019. Looking ahead, American expects second quarter capacity to be around 92% to 94% of its figures for the second quarter of 2019. In fact, March was the first month since the pandemic that its revenue exceeded 2019 levels. Since then, bookings have steadily increased. On top of that, the company also expects total revenue to be 6-8% higher than the second quarter of 2019. As American continues its struggle to return to profitability, should you add the AAL action on your watch list?
[Read More] 3 tech stocks to watch today after earnings reports
Finally, we have Trip.com, a leading online travel agency that serves as a one-stop travel platform. It integrates a full suite of travel products and services and differentiated travel content. Impressively, it is currently one of the largest online travel agencies in China and also one of the largest travel service providers in the world. In March, the company released its annual financial statements for fiscal 2021.
To start, net revenue for the year was $3.1 billion, representing a 9% year-over-year increase in revenue. Additionally, revenue from accommodation bookings was $1.3 billion, up 14% from 2020. That’s 41% of total revenue, a pretty big chunk. Over the past year, the company has focused on expanding its product offering and enhancing its content capabilities. All of this will pave the way for its long-term growth. Going forward, Trip.com will continue to focus on its recovery in the Chinese domestic market while remaining ambitious on its vision for the global reopening of travel. Given the positive outlook, should you buy TCOM shares?
If you enjoyed this article and want to learn how to trade so that you have the best chance of making a profit consistently, you need to check out this YouTube channel.
CLICK HERE NOW!!