3 Travel Stocks to Buy as a Strong Dollar Buoys Vacationers

Stocks to buy

While the phenomenon known as revenge travel has faded, investors should still consider the bullish case for travel stocks. Right now, the U.S. dollar enjoys a strength relative to many other international currencies. As such, American tourists benefit from incredible purchasing power – and they’re flexing it.

Another factor that helps move the narrative along is the concept of travel prioritization. Again, the acuteness of the “revenge” angle has subsided. However, the Covid-19 pandemic sparked a behavioral shift among consumers. People are simply emphasizing experiential expenditures and that also bolsters the case for these travel stocks to buy.

Wyndham Hotels & Resorts (WH)

Source: Mihai_Andritoiu / Shutterstock

Based in Parsippany, New Jersey, Wyndham Hotels & Resorts (NYSE:WH) falls under the lodging industry. It operates as a hotel franchisor in the U.S. and internationally. Its main business unit focuses on licensing its lodging brands. It also provides related services to third-party hotel owners. Some of the brands under Wyndham’s portfolio include Super 8, Days Inn, Travelodge and its namesake hotels.

To be fair, Wyndham is on a recovery trek. In 2023, the company posted sales of only $1.4 billion. That was down almost 7% from last year’s result of $1.5 billion. And that was down from 2021’s sales of $1.57 billion. However, in the trailing 12 months (TTM), Wyndham posted a net income of $238 million or earnings per share of $2.84. Also, revenue reached $1.39 billion.

For the current fiscal year, covering experts believe that sales will ultimately land at $1.49 billion, up nearly 7%. Further, EPS could rise to $4.36, implying expansion of just under 28%. These targets seem believable because of travel prioritization dynamic. Thus, WH may rank among the travel stocks to buy.

United Airlines (UAL)

Source: m.photo / Shutterstock.com

Headquartered in Chicago, Illinois, United Airlines (NASDAQ:UAL) through its subsidiaries provides air transportation services. The company transports both passengers and cargo through its mainline and regional fleets. Moreover, United offers catering, ground handling, flight academy and maintenance services for third parties. While Covid-19 has been an obvious headwind for UAL, shares appear poised for a wider recovery.

The upswing can’t come soon enough. In 2020, United posted sales of $15.36 billion, down a staggering 64.5% from the prior year’s tally of $43.26 billion. However, it’s well on its way to a recovery, with 2023 seeing revenue rise to $53.72 billion. Combined with the greenback being worth more than competing major currencies, Americans have all the more reason to travel. That’s good news for UAL stock.

In the TTM period, the airliner posted net income of $2.69 billion, translating to EPS of $8.09. Revenue during the period hit $54.83 billion. For the current fiscal year, analysts are looking for a top line of $58.26 billion, up 8.46% from the prior year. Also, EPS may rise to $10.30, a gain of 30.55%. UAL belongs on your radar of travel stocks to buy.

Trip.com (TCOM)

Source: Ralf Liebhold / Shutterstock

Based in Singapore, Trip.com (NASDAQ:TCOM) through its subsidiaries operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours and in-destination, corporate travel management. Its main market is in China, though Trip.com serves other international regions. Granted, TCOM stock is a riskier idea due to uncertainties tied to Chinese consumers. Still, it could be intriguing.

Part of the reason is that analysts absolutely love TCOM. Right now, it features a unanimous strong buy rating and that’s among 14 experts. Further, the average price target stands at $68.06, implying a robust upside. Finally, the most optimistic target calls for a per-share price of $87.

As with other travel stocks, TCOM suffered badly because of the Covid-19 crisis. In 2020, the company posted revenue of $18.32 billion, down almost 49% from last year’s result of $35.67 billion. However, in 2023, Trip.com posted sales of $44.51 billion.

For this year, experts believe that the top line could expand by 20.2% to $53.5 billion. Also, EPS could rise 47% to $21.72. If you’re willing to take some risks with your travel stocks, TCOM should be on your radar.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Articles You May Like

3 Dividend Stocks That Have Been Keeping Shareholders Happy for 50 Years
3 Software Stocks Ready to Shine in Summer 2024
June Gloom? 3 Stocks to Sell Before They Plunge
3 Sleeper Stocks Positioned for Huge Growth by 2025
Rent the Runway Stock: The Recession-Proof Fashion Play for Bold Investors