InvestorPlace – Stock Market News, Stock Advice & Trading Tips
Travel is back in a big way.
A record number of people are traveling for the July 4 holiday. In fact, 71 million Americans are hitting the road, taking to the skies and traversing waterways, according to data from the American Automobile Association (AAA). Travel is now well above pre-pandemic levels. For Independence Day this year, 5.7 million more Americans are traveling more than they did in 2019 before Covid-19, said AAA.
Also, air travel was on track to set a new record over Independence Day, with 5.74 million people flying to their holiday destination. Many more Americans embarked on road trips, with 60 million people expected to travel by car over the holiday, up 5% from 2023. At the same time, cruise lines report record numbers of passengers and claim their ships are booked well into next year. All the activity makes now the perfect time to own stocks of travel companies.
Let’s soar with three best travel stocks to buy in July 2024.
Source: StudioPortoSabbia / Shutterstock.com
Swiss cruise operator Viking Holdings (NYSE:VIK) went public in the U.S. in May of this year. Already, its stock is up 30%. The strong performance makes Viking Holdings one of the most successful initial public offerings (IPO) of the year. Analysts expect VIK stock’s stellar performance to continue given the company’s profitability, wealthy clientele and long-term growth potential.
Founded in 1997 and headquartered in Basel, Switzerland, Viking Holdings today generates $3 billion in annual revenues and employs more than 10,000 people. The company primarily runs cruise ships along European rivers and caters to older travelers. It does not allow people under 18 on its ships. More about the company will be known when it issues its next financial results in late August. But this new travel stock certainly looks promising.
Source: sdx15 / Shutterstock.com
Airbnb (NASDAQ:ABNB) remains a top travel stock, especially with summer holidays in full-swing. The homestay and short-term rental company’s share price has gained 14% so far this year as it recovers from the ravages of the pandemic and grows both its sales and profits.
For this year’s first quarter, Airbnb posted EPS of 41 cents, which was well ahead of a consensus estimate of 24 cents. The quarterly profit was up 126% from a year ago and the company’s best first quarter ever.
Revenue in Q1 totaled $2.14 billion, ahead of Wall Street forecasts of $2.06 billion. Sales were up 18% from a year earlier. Gross bookings in the quarter were up 12% year-over-year (YOY), while nights and experiences booked rose 10%. Airbnb’s free cash flow at the end of the quarter totaled $1.90 billion, up 21% from the same period in 2023.
By all accounts, it was a blowout quarter and showed the company is benefitting from the resumption of travel, both in the U.S. and overseas.
Source: GagliardiPhotography / Shutterstock.com
Now for a dip buying opportunity. Shares of American Airlines (NASDAQ:AAL), the world’s largest carrier, are down nearly 40% over the last 12 months and trading near a 52-week low. This presents an opportunity for investors, particularly ones with a long time horizon. AAL stock is down after the airline lowered its sales and profit guidance as it grapples with a slump in business travel.
Also, American Airlines recently announced that its Chief Commercial Officer (CEO) Vasu Raja was leaving the company at the end of June. News of the lowered guidance and executive departure has sent AAL stock spiraling lower. The problem is a decline of corporate customers and business travel, something American Airlines has struggled to reignite since the end of the pandemic.
The good news is that management has a plan. CEO Robert Isom has said that American Airlines plans to modify its ticket distribution strategy to drive bookings to its own platforms instead of third-party channels. That strategy could help the company and its stock recover. Investors who take a position in AAL stock now might be patting themselves on the back down the road.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
The post The 3 Best Travel Stocks to Buy in July 2024 appeared first on InvestorPlace.
