Summer is just around the corner, so today we’re buckling up, sipping on a glass of something cool and bubbly and checking out some travel stocks taking off this summer. After that, we’ll give you a rundown of the fundamental market events that you can’t afford to miss this week.
3 Top Stocks for Summer 2023
The last few years have been seriously challenging for the travel industry. Lockdowns and travel bans pretty much shut down travel in 2020 and 2021. 2022 saw increased mobility and an uptick in revenues, but a lot is riding on the coming summer.
Which companies are positioned well for the summer 2023 bounce-back? Let’s have a look.
Note: the period “Summer 2022” refers to the traditional “June-August” summer period.
#1 Marriott (MAR)
Price 01.01: 147.67 USD
Price 21.04: 174.11 USD
YTD performance: +17.91%
Summer 2022 performance: -8.5%
MAR Stock, 2023
Marriott is the world’s largest hotel company, with over 8,000 properties in 139 countries and territories.
In the fourth quarter of 2022, the company’s revenue was up 53% year-over-year and its earnings per share were up 115%. So far this year, MAR stock has been on an upward trend, climbing almost 18% since January 1.
The company is facing the challenge of rising inflation, putting pressure on hotel prices and also competition from other hotel chains. But it’s optimistic about the future of travel and expects its business to continue to recover in 2023.
It’s already impressive numbers ahead of the busiest time of the year surely make MAR stock a definite possibility for many traders.
#2 Booking Holdings (BKNG)
Price 01.01: 2032.21 USD
Price 21.04: 2,687.33 USD
YTD performance: +32.24%
Summer 2022 performance: -16.2%
Booking.com probably needs no intro, but just in case. It’s a leading online travel company that provides a variety of services, including hotel bookings, car rentals, flights, and vacation rentals.
In 2023, Booking.com is expected to generate $24.7 billion in revenue and $10.0 billion in net income. Those are big numbers, right? Well, that’s what a summer season without lockdowns can do.
That revenue is expected to come mainly from the company’s stock hotel booking services, but Booking is also investing in new growth opportunities. The company is expanding its offerings to include more vacation rentals and activities.
The targets are lofty, but Booking has the pedigree and as a well-managed company the future, that’s summer 2023 and beyond, looks bright.
#3 The Walt Disney Company (DIS)
Price 01.01: 88.97 USD
Price 21.04: 99.57 USD
YTD performance: +11.91%
Summer 2022 performance: +2.6%
The Walt Disney Company (DIS) is a diversified media and entertainment company that owns a portfolio of iconic brands, including Disney, Pixar, Marvel, Lucasfilm, and National Geographic.
The company operates in four segments: Media Networks, Parks and Resorts, Studio Entertainment, and Direct-to-Consumer and International. These highly diversified sectors afford the company and investors year-round growth potential.
But, a couple of those sectors are especially busy in the warmer months, and, like its rivals on this list, the company is banking on the continued recovery of the travel industry.
DIS stock is currently trading at $134.50 per share. The stock has a market capitalisation of $238.2 billion and a P/E ratio of 16.6.
Crucially for investors, success for Disney does not solely rely on a strong performance in summer 2023. It’s a well-priced stock, with arguably less risk than others on this list. It’s understandable then, that Disney is such a popular option for many.
A fragile industry
These companies don’t need to be told just how delicate the travel industry really is. There are tons of examples of companies that have folded due to the very fine balance of conditions that need to be maintained for such companies to survive.
A couple of those examples include Thomas Cook and Wow Air.
Thomas Cook was a British package holiday company. It was founded in 1841 and was one of the oldest travel companies in the world.
The company went bankrupt in September 2019 after failing to secure a £200 million bailout from the UK government. The collapse of Thomas Cook stranded over 600,000 travellers around the world.
Wow Air was an Icelandic low-cost airline that operated flights between North America and Europe. It was founded in 2011 and quickly became one of the most popular low-cost carriers in the world. Despite that, the company struggled due to rising fuel costs and increased competition. Wow Air went bankrupt in March 2019, leaving over 20,000 passengers stranded. Not so wow, then.
The demise of both Thomas Cook and Wow Air is a reminder that even the largest and most established travel companies are not immune to financial failure.
What stocks are you planning to trade ahead of the summer? Are there any you’d avoid? Let us know by tweeting us at @_contentworks.
Top fundamental events week commencing 24/04/23
Let’s see what’s coming up this week..
Monday, 24 April
● EUR — Ifo Business Climate (APR)
Tuesday, 25 April
● USD — CB Consumer Confidence (APR)
Wednesday, 26 April
● AUD — Inflation Rate YoY (Q1)
● EUR — GfK Consumer Confidence (MAY)
● USD — Durable Goods Orders MoM (MAR)
Thursday, 27 April
● USD — GDP Growth Rate QoQ Adv (Q1)
Friday, 28 April
● JPY — BoJ Interest Rate Decision; BoJ Quarterly Outlook Report
● EUR — Germany Unemployment Change (APR); Germany Unemployment Rate (APR); GDP Growth Rate QoQ Flash (Q1); GDP Growth Rate YoY Flash (Q1)
● USD — Core PCE Price Index YoY (MAR); PCE Price Index YoY (MAR); Michigan Consumer Sentiment Final (APR)
Saturday, 29 April
No major events are planned.
Sunday, 30 April
● CNY — NBS Manufacturing PMI (APR)
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The Contentworks team