FLiRT Fears: 3 Travel Stocks to Buy on the Dip if Covid Variant Spikes


  • These are the travel stocks to buy on corrections as they represent good long-term ideas for sustained value creation
  • Bookings Holdings (BKNG): Annual free cash flow visibility of more than $10 billion makes the stock attractive
  • Tripadvisor (TRIP): EBITDA margin expansion likely on the back of improved operational efficiency for Viator and TheFork
  • MakeMyTrip (MMYT): A big addressable market in India and the company has the highest market share in online travel bookings
travel stocks to buy - FLiRT Fears: 3 Travel Stocks to Buy on the Dip if Covid Variant Spikes

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Travel stock investors might be flirting with danger with the likelihood of a spike in Covid FLiRT variants this summer. As cases related to the FLiRT variants rise globally, it’s important to remain cautiously optimistic. However, on the dip, these travel stocks to buy could be strong.

My strategy would be to book profits in travel stocks that have surged in the last 18 to 24 months. If the FLiRT variants cause some panic selling, it would be a good time to look at quality travel stocks to buy.

Of course, this entire strategy assumes that cases related to these variants spike significantly. However, it’s also important to note that GDP growth in the U.S. has significantly decelerated in Q1 2024.

If rate cuts are delayed, there is likely to be an impact on discretionary spending. It therefore makes sense to book profits in high-flying travel stocks and re-enter on possible correction within the next two quarters.

Travel Stocks to Buy on the Dip: Booking Holdings (BKNG)

a person opens up on a smartphone
Source: Denys Prykhodov /

Booking Holdings (NASDAQ:BKNG) is a quality blue-chip travel stock to buy on corrections. In the last 12 months, BKNK stock has gradually trended higher. However, valuations remain attractive with the stock trading at a forward P/E of 21.5. Any correction on FLiRT fears would be a golden opportunity to accumulate.

For Q1 2024, Booking Holdings reported healthy growth in gross booking by 10% on a year-on-year basis to $43.5 billion. Further, total revenue increased by 17% on a year-on-year basis to $4.4 billion. It’s worth noting that the company’s room nights, rental car days, and airline tickets sold touch the highest level since Q1 2022.

I must add here that Booking Holdings reported free cash flow of $2.6 billion for the quarter. This implies an annualized FCF potential of more than $10 billion. Therefore, there is ample flexibility for dividends and platform development. Overall, the business is a cash flow machine with low capital investments. BKNK stock is therefore worth accumulating on declines for the core portfolio.

Tripadvisor (TRIP)

image of mobile phone screen displaying tripadvisor logo (TRIP)
Source: Tero Vesalainen /

Tripadvisor (NASDAQ:TRIP) stock has declined by 17% for year-to-date. Any potential surge in covid cases might translate into further weakness for TRIP stock. This would be a good opportunity to accumulate with the stock trading at an attractive forward P/E of 13.4.

In February, Tripadvisor had formed a special committee to evaluate potential merger and acquisition opportunities. The committee indicated in May that “there is no transaction with a third party that is in the best interests of the company and its stockholders.” This resulted in a sell-off for TRIP stock.

However, leaving this aside, business developments remain positive. For Q1 2024, Tripadvisor reported revenue and adjusted EBITDA growth of 6% and 42% respectively. It’s likely that healthy EBITDA margin expansion will sustain on the back of margin improvement for Viator and TheFork.

Further, Tripadvisor ended Q1 2024 with a liquidity buffer of $1.7 billion. As the special committee continues to evaluate opportunities, potential acquisition can boost top-line growth.

MakeMyTrip (MMYT)

A photo of an excited woman riding on the back of a bike a man is driving.
Source: OPOLJA /

In March 2020, MakeMyTrip (NASDAQ:MMYT) stock had touched lows of $11.2. The rally has been significant from those levels with MMYT stock currently trading at $77. Considering the potential the Indian tourism industry holds, MMYT is likely to be a multibagger even from current levels. However, I would wait for some correction before fresh exposure.

Talking about the market size, Indian travellers are expected to undertake five billion more trips by 2030. Further, the travel and tourism spend by Indians will be the fourth largest globally by the end of the decade at $410 billion. Clearly, there is a massive opportunity and MakeMyTrip is positioned to benefit as the company has a leading market share in online booking.

Specific to the company, profitability has been improving on a sustained basis. In financial year 2021, MakeMyTrip reported operating loss of $18 million. For FY24, operating profit was $124.2 million. With continued upside in gross bookings, I expect margin improvement to sustain. Make the right play and grab these travel stocks to buy.

On the date of publication, Faisal Humayun 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 Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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