We are very close to 2024 and before we embark on the new year, we have the holiday season. This is typically when consumer spending is at its highest, and the economy sees a strong recovery. We are doing much better now than when the year started, and there are several travel stocks to buy that are ready to take home big gains. This is a great time for the companies to see revenue growth. With oil prices soaring you would think that people would be choosing to stay close to home. However, reports show a record number of Americans have already booked their holiday travel and beyond.
Smart investors know that investing in travel stocks now will mean significant gains in the next few months. With that in mind, let’s take a look at the three travel stocks to buy that are ready to roar.
Walt Disney (DIS)
The entertainment icon Walt Disney (NYSE:DIS) has been on a tumultuous ride over the past few months. It suffered during the pandemic and is slowly regaining ground. However, the stock is down 6% year-to-date (YTD). The company did report impressive financials in a tough market. In the recent quarter, it reported a revenue of $22.33 billion, a 3.84% year-over-year (YOY) rise. On the other hand, it saw a massive drop in the net income and earnings per share (EPS). The EPS came in at $1.03 but managed to beat expectations.
With a diversified business, Disney has the potential to bounce back in the near term. In an attempt to attract customers to its parks, Disney has decided to offer discounts on children’s tickets until early next year. This could boost the attendance during the holiday season. It also plans to invest about $60 billion in parks over the next ten years. It is a cash cow for the company and Disney has steadily tried to look for ways to increase attendance and boost hotel room occupancy. Its investment has also paid off since the parks division saw a revenue of $8.3 billion, a 13% rise in the recent quarter.
DIS stock is trading at a discount and is a good buy at the current level.
Royal Caribbean Cruises (RCL)
If you are investing in travel stocks, I’d recommend you diversify by investing across different sectors. Royal Caribbean (NYSE:RCL) has seen a massive upside in the last 12 months. RCL stock is up 121% in the past 12 months and 86% YTD. In the second quarter, the company saw a revenue of $3.52 billion which is a 61% YOY growth and the net income increased by 188% year-over-year to hit $458.8 million. The numbers are encouraging and it shows that the company is moving in the right direction.
The company has seen an upsurge in bookings for 2024 as compared to the previous year and while the demand will remain below the 2020 levels, the company has a long way to go. I believe this stock rally will continue through 2024. One reason why investors were always worried about this stock was the debt-heavy balance sheet but as business improves, the company will also improve its credit position. In the second quarter, it repaid $1.6 billion in debt. The interest expense will also be sizeable on the debt but the company is now generating cash flow and could be soon in a position to refinance the debt.
Airbnb (ABNB)
Having recovered from the huge blow from the pandemic, Airbnb (NASDAQ:ABNB) is standing strong and is one of the top travel stocks to buy. While there is a lot of skepticism around the future of the company, I believe we shouldn’t write it off just yet. Its financials are proof that the company is doing well and the second quarter reports show sales of $2.5 billion, an 18% jump YOY. It also ended the quarter with a free cash flow of $900 million and the results have shown that guests are still looking for longer stays.
The company’s success lies behind the massive network it owns. With more than 4 million hosts, it offers unique stays at even the most remote places. In the quarter, it saw 115 million nights booked and I believe this number will be higher during Christmas. As more people look to enjoy their experience at an Airbnb over a hotel, the platform continues to attract hosts. This is a positive sign and one that is generating revenue for the company.
It is always working on ways to improve its products and services to offer better experiences to customers. I believe the third quarter numbers will be impressive due to Summer travel and the stock momentum will continue.
On the date of publication, Vandita Jadeja did not hold (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.
