In this article, we will look at the 12 Most Undervalued Travel Stocks To Buy According To Hedge Funds.
Stephen Parker, JPMorgan Private Bank co-head of global investment strategy, appeared on CNBC’s ‘Squawk Box’ on February 4 to talk about the latest market trends and outlook for 2026.
He was of the view that what we are seeing in the markets this year, so far, is “very healthy”, saying that a lot of people would have been skeptical about the idea of sitting near all time highs, especially when the tech sector has been the worst performing sector in the S&P and has fallen more than everyone else. This broadening story that we are seeing, according to Parker, is reflective of the anxiety investors have had over the last couple of years. It has been all tech, all the time, and people have been worried about concentration risks.
READ ALSO: 10 Best Confectionery, Cookie and Snack Stocks To Buy and 15 Best Long Term Low Volatility Stocks to Invest In.
However, he stated that now we are seeing a rotation, and it is about the broadening of the recovery story, with cyclicals picking up the slack. It is not just the AI infrastructure players and the hyperscalers that are driving the markets higher; it is actually the AI beneficiaries, according to Parker, and that may cause some disruptions, particularly in sectors like software.
With these broader trends about the market in view, let’s narrow down to the most undervalued travel stocks to buy according to hedge funds.
Our Methodology
We sifted through stock screeners to find the best travel stocks with a forward P/E below 15. We then chose the top 12 with the highest number of hedge fund holders, as of Q3 2025, sourcing the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was recorded on February 4.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12 Most Undervalued Travel Stocks To Buy According To Hedge Funds
12. Choice Hotels International, Inc. (NYSE:CHH)
Number of Hedge Fund Holders: 31
Choice Hotels International, Inc. (NYSE:CHH) is one of the most undervalued travel stocks to buy according to hedge funds. On February 3, JPMorgan lifted the price target on Choice Hotels International, Inc. (NYSE:CHH) to $102 from $95 while maintaining a Neutral rating on the shares. The firm adjusted price targets in the lodging group as part of a fiscal Q4 preview, and told investors in a research note that investor expectations “appear reasonably set” with the U.S. lodging sector exhibiting mixed trends.
The same day, Goldman Sachs also raised the price target on Choice Hotels International, Inc. (NYSE:CHH) to $100 from $90 and reaffirmed a Neutral rating on the shares. The firm continually anticipates an acceleration in U.S. RevPAR growth from 2025, with the World Cup and higher tax refunds/potential stimulus offering some support.
Choice Hotels International, Inc. (NYSE:CHH) also received a rating update from Morgan Stanley on January 16. Morgan Stanley cut the price target on the stock to $91 from $106, keeping an Equal Weight rating on the shares and telling investors that lodging, gaming, and leisure fundamentals were “muted” in 2025. It expects “more of the same fundamentally” in 2026, but with the added wrinkle of rates boosting goods over services.
Choice Hotels International, Inc. (NYSE:CHH) is involved in the franchising and operation of hotels. The company’s operations are divided into the Hotel Franchising, and Corporate and Other segments.
11. Travel + Leisure Co. (NYSE:TNL)
Number of Hedge Fund Holders: 32
Travel + Leisure Co. (NYSE:TNL) is one of the most undervalued travel stocks to buy according to hedge funds. On January 28, Cognizant announced the renewal of a multi-million-dollar strategic collaboration with Travel + Leisure Co. (NYSE:TNL), stating that the extended collaboration would focus on expediting the latter’s digital transformation through a modernization of its technological infrastructure. This would also include the employment of AI to offer improved experiences for its members and owners.
Management reported that the terms of agreement entail that Travel + Leisure Co.’s (NYSE:TNL) technology ecosystem would be optimized by Cognizant by employing its extensive hospitality domain expertise, aimed at improving digital service experiences for its travel club members and 800,000 owner families. Cognizant would support Travel + Leisure Co. (NYSE:TNL) throughout the term of the agreement, assisting with bolstering infrastructure scalability and reliability, modernizing the application landscape, and harnessing data- and AI-driven capabilities.
In another development, Travel + Leisure Co. (NYSE:TNL) announced on January 21 the celebration of the official opening of its new global headquarters in Downtown Orlando, attended by development partners, local leaders, and associates.
Travel + Leisure Co. (NYSE:TNL) offers vacation ownership, managed rental, and exchange services. The company owns exchange properties and vacation resorts, and its comprehensive cruise coverage enables users to get the best deals, the newest ships, and immersive itineraries on the high seas. Its offerings include Alaskan, All-Inclusive, Caribbean, Disney, European, Family, and River cruises.
10. SkyWest, Inc. (NASDAQ:SKYW)
Number of Hedge Fund Holders: 36
SkyWest, Inc. (NASDAQ:SKYW) is one of the most undervalued travel stocks to buy according to hedge funds. SkyWest, Inc. (NASDAQ:SKYW) received a rating update from Evercore ISI on January 30, which reiterated a Buy rating on the stock with a price target of $130.00.
The rating update came after SkyWest, Inc. (NASDAQ:SKYW) reported financial and operating results for fiscal Q4 2025 on January 29. Net income for the quarter was $91 million, or $2.21 per diluted share, compared to $97 million, or $2.34 per diluted share, in the prior year period. Net income for the full year 2025 was $428 million, or $10.35 per diluted share, up from $323 million, or $7.77 per diluted share, for 2024. Net income for 2025 thus experienced a 33% growth from 2024, reflecting year-over-year block hour growth of 15%.
SkyWest, Inc. (NASDAQ:SKYW) also reported that it took delivery of five new E175 aircraft in the quarter under a previously announced agreement with United Airlines, and that it reached a multi-year contract extension with United for 40 E175 aircraft in January 2026. SkyWest, Inc. (NASDAQ:SKYW) also reached a multi-year contract extension with Delta Air Lines for 13 E175 aircraft in January 2026.
SkyWest, Inc. (NASDAQ:SKYW) provides scheduled passenger services in the United States of America, Mexico, Canada, and the Caribbean. The company’s operations are divided into the SkyWest Airlines and SWC, and SkyWest Leasing segments.
9. Trip.com Group Limited (NASDAQ:TCOM)
Number of Hedge Fund Holders: 37
Trip.com Group Limited (NASDAQ:TCOM) is one of the most undervalued travel stocks to buy according to hedge funds. CGS International reaffirmed a Buy rating on Trip.com Group Limited (NASDAQ:TCOM) on January 22 and set a price target of HK$551.00.
In a separate development, Trip.com Group Limited (NASDAQ:TCOM) reported on January 14 that it received a notice of investigation from the State Administration for Market Regulations of the People’s Republic of China (SAMR), stating the commencement of an investigation by the SAMR involving the company pursuant to the Anti-Monopoly Law of the People’s Republic of China. Trip.com Group Limited (NASDAQ:TCOM) stated that its business operations remain normal and that it would actively cooperate with the investigation.
The same day, JPMorgan stated that China’s State Administration for Market Regulation opened a formal Anti-Monopoly Law case into Trip.com Group Limited (NASDAQ:TCOM) for suspected abuse of a dominant market position, and cited “prior verification” as the basis for filing the case. The firm stated that it expects the stock’s share price to be negatively affected by the news in the following few trading sessions, and that it is likely to enter into a 4-6-month range-bound phase after the initial drawdown. JPMorgan added that incremental information tends to come slowly until a penalty decision is published by the regulator.
Trip.com Group Limited (NASDAQ:TCOM) is a global one-stop travel platform that offers packaged tours, airline tickets, accommodations, corporate travel management, property management systems, advertising services, and more. The company operates under a range of brands, including Ctrip, Qunar, Trip.com, and Skyscanner.
8. Southwest Airlines Co. (NYSE:LUV)
Number of Hedge Fund Holders: 40
Southwest Airlines Co. (NYSE:LUV) is one of the most undervalued travel stocks to buy according to hedge funds. Susquehanna lifted the price target on Southwest Airlines Co. (NYSE:LUV) to $55 from $45 on February 3 and maintained a Neutral rating on the shares, telling investors that the company has made considerable progress with its turnaround efforts.
It added that Southwest Airlines Co. (NYSE:LUV) is going into 2026 with renewed momentum, supported by its completion of apparently unachievable external and international goals. These include the introduction of bag fees, streamlining of the corporate workforce, and the assigning of extra-legroom seating. Susquehanna stated that although execution risks are still present, it is getting more comfortable with the company’s ability to set and achieve its targets.
The same day, Citi also raised the price target on Southwest Airlines Co. (NYSE:LUV) to $54 from $44 while maintaining a Neutral rating on the shares. The firm stated that it is “tactically bullish” on the airlines sector, and updated targets and estimates in the group after the fiscal Q4 reports.
Southwest Airlines Co. (NYSE:LUV) is involved in the operation and management of a passenger airline. The company also provides ancillary services, including upgraded boarding, transportation of pets and unaccompanied minors, and early bird check-ins. Its operations are spread in the United States, the Commonwealth of Puerto Rico, Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.
7. American Airlines Group Inc. (NASDAQ:AAL)
Number of Hedge Fund Holders: 43
American Airlines Group Inc. (NASDAQ:AAL) is one of the most undervalued travel stocks to buy according to hedge funds. On February 3, Citi added an “upside 90-day catalyst watch” on American Airlines Group Inc. (NASDAQ:AAL) and reiterated a Buy rating on the stock with a $21 price target. The firm stated that it is “tactically bullish” on the airline sector after the fiscal Q4 reports.
However, TD Cowen cut the price target on American Airlines Group Inc. (NASDAQ:AAL) to $17 from $19 on January 30, keeping a Buy rating on the shares. The firm told investors that it updated its model with Q1 EPS standing near the low end of the range, given complications surrounding Winter Storm Fern.
The rating updates came after American Airlines Group Inc. (NASDAQ:AAL) reported its fiscal Q4 and full year 2025 financial results on January 27, reporting record Q4 revenue of $14.0 billion, despite a negative impact of $325 million from the government shutdown. Management reported sequential improvement in year-over-year passenger unit revenue performance compared to Q3 in each of the international entities, and added that the company reduced its total debt by $2.1 billion in 2025.
American Airlines Group Inc. (NASDAQ:AAL) operates a network carrier through its principal wholly owned mainline operating subsidiary, American, offering air transportation services for cargo and passengers. The company’s operations are divided into the following geographical segments: Domestic, Latin America, Atlantic, and Pacific.
6. Alaska Air Group, Inc. (NYSE:ALK)
Number of Hedge Fund Holders: 44
Alaska Air Group, Inc. (NYSE:ALK) is one of the most undervalued travel stocks to buy according to hedge funds. TD Cowen cut the price target on Alaska Air Group, Inc. (NYSE:ALK) to $63 from $64 on January 30, reaffirming a Buy rating on the shares and telling investors that it updated its estimates to take into account guidance for Q1/FY26.
In addition to TD Cowen, Morgan Stanley also maintained a bullish stance on Alaska Air Group, Inc. (NYSE:ALK) on January 23, maintaining a Buy rating and stating that the company finished the year with earnings meaningfully above expectations in fiscal Q4. These positive trends were supported by a more favorable fuel expense, reduced tax rate, and better cost control.
The firm also stated that synergies are tracking ahead of plan, with early 2026 booking trends showing particular strength. Morgan Stanley sees a credible path to earnings of $6.50 per share without the need for additional macro or industry tailwinds, adding that further upside is possible through continual improvement in the U.S. domestic demand.
The rating updates came after Alaska Air Group, Inc. (NYSE:ALK) reported its fiscal Q4 and full year 2025 results on January 22, with reported EPS of $0.18 and adjusted earnings per share of $0.43, ahead of expectations and previous guidance range. The company generated $1.2 billion in operating cash flow for the full year. In addition, Alaska Air Group, Inc. (NYSE:ALK) achieved a single operating certificate for Hawaiian Airlines and Alaska Airlines.
Alaska Air Group, Inc. (NYSE:ALK) provides air transportation services and operates through the following segments: Alaska Airlines, Hawaiian Airlines, and Regional.
5. Lyft, Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 51
Lyft, Inc. (NASDAQ:LYFT) is one of the most undervalued travel stocks to buy according to hedge funds. UBS lowered the price target on Lyft, Inc. (NASDAQ:LYFT) to $21 from $22 on February 2, maintaining a Neutral rating on the shares.
In a separate development, Freenow by Lyft, Inc. (NASDAQ:LYFT) and the City of Hamburg signed a Memorandum of Understanding to advance the integration of autonomous vehicles into the city’s future-focused mobility ecosystem. The initiative marks the first collaboration for Germany signed between a city and a private company for the establishment of a strategic framework to introduce Level 4 AVs into the taxi sector, along with setting clear guidelines on the way AVs would be integrated into a city’s mobility ecosystem.
Hamburg would operate as an integrated, hybrid mobility market following the launch of the AVs, and both Freenow by Lyft, Inc. (NASDAQ:LYFT) and the City of Hamburg believe that drivers will retain their centrality in the mobility system, as their expertise is critical with AVs bolstering the overall network and creating additional job opportunities in operations, maintenance, and fleet management.
Lyft, Inc. (NASDAQ:LYFT) provides and manages an online social ride-sharing community platform that offers users access to a nexus of shared rides, scooters, and bikes. The company also offers information about neighboring public transit routes and a view of transportation options when planning a trip through Lyft Rentals.
4. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Number of Hedge Fund Holders: 58
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is one of the most undervalued travel stocks to buy according to hedge funds. On February 2, Oceania Cruises, a wholly owned subsidiary of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), announced that it attained record-breaking booking levels on January 28, 2026, which marked the opening day of reservations for its newest ship, Oceania Sonata. The bookings exceeded the launch-day bookings of Oceania Cruises’ previous new ship, Oceania Allura™, by a notable 45%.
Management reported that the demand for Oceania Sonata’s inaugural season was “brisk”, with significant demand across the suite categories, highlighting its decision to upsize the allotment of high-yielding accommodations from the previous class of new ships.
In another development, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) received a rating update from JPMorgan on January 20, which cut the price target on the stock to $28 from $40 while maintaining an Overweight rating on the shares. The firm also removed the stock from its Analyst Focus List and cut its Q1 net yield estimate below consensus.
However, Citi reiterated a Buy rating on Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) on January 14, lifting the price target to $29 from $26. The firm told investors that it expects “conservative” outlooks from the cruise names during the Q4 earnings season, with indicators suggesting that either the demand environment has decelerated or the supply environment in the Caribbean market has “gotten crowded,” or even some combination of both.
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a global cruise company that operates Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. The company’s brands offer a range of amenities, activities, and features, including bars and lounges, multiple dining venues, retail shopping areas, spas, casinos, and numerous entertainment choices.
3. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 66
United Airlines Holdings, Inc. (NASDAQ:UAL) is one of the most undervalued travel stocks to buy according to hedge funds. On February 3, Citi lifted the price target on United Airlines Holdings, Inc. (NASDAQ:UAL) to $155 from $153 and maintained a Buy rating on the shares. The firm also added an “upside 90-day catalyst watch” on the stock and stated that it is “tactically bullish” on the sector.
In another development, Bernstein also raised the price target on United Airlines Holdings, Inc. (NASDAQ:UAL) to $136 from $129 on January 27, keeping an Outperform rating on the shares. The firm told investors that the company delivered a solid fiscal Q4 2025 beat, fiscal Q1 2026 raise, and an in-line fiscal year 2026 guide, with a bullish commentary suggesting that the guide is quite conservative. Bernstein thus anticipates United Airlines Holdings, Inc. (NASDAQ:UAL) to come in at the high-end of the guide.
United Airlines Holdings, Inc. (NASDAQ:UAL) also received a bullish rating update from BofA on January 23, which lifted the price target on the stock to $145 from $130 while keeping a Buy rating. According to the firm, fiscal Q4 results and the earnings call “echoed similar themes” to Delta, with improving demand trends, premium revenues leading, and guidance remaining conservative on last year’s industry volatility. BofA lifted its fiscal Q1 EPS view to $1.30 from $1.08, slightly above the $1.25 guidance midpoint, while its 2026 EPS estimate was lifted to $13.25 from $13.08 with a strong demand start to 2026.
Headquartered in Chicago, IL, United Airlines Holdings, Inc. (NASDAQ:UAL) provides transportation services and operates through the following geographical segments: Domestic, Atlantic, Pacific, and Latin America.
2. Carnival Corporation & plc (NYSE:CCL)
Number of Hedge Fund Holders: 69
Carnival Corporation & plc (NYSE:CCL) is one of the most undervalued travel stocks to buy according to hedge funds. Citi reaffirmed a Buy rating on Carnival Corporation & plc (NYSE:CCL) on January 14 and set a $39 price target.
Carnival Corporation & plc (NYSE:CCL) also received a rating update from TD Cowen on January 13, which lifted the price target on the stock to $38 from $35 while maintaining a Buy rating. The firm adjusted price targets in the cruise lines group as part of its 2026 outlook and told investors that despite Caribbean yield headwinds, the underlying cruise demand is strong, with capacity trends favorable through fiscal 2029. It thus expects share upside in 2026 as investors look past “temporary” Caribbean pressures.
In another development, BofA lifted the price target on Carnival Corporation & plc (NYSE:CCL) to $45 from $40 on January 12 and maintained a Buy rating. The firm stated that the aggregated credit and debit card data shows a 10.5% year-over-year growth in monthly cruise spend in December, adding that strength in cruise spending is continually standing out compared to other travel categories. For perspective, total travel spend fell 1.9% year-over-year in December, with hotel spend down 2.4%, and airline spend down 4.1%.
Carnival Corporation & plc (NYSE:CCL) is a global cruise and leisure travel company with a portfolio of cruise lines, including AIDA Cruises, Carnival Cruise Line, Princess Cruises, Costa Cruises, Cunard, Holland America Line, P&O Cruises (Australia), and more. Its segments are divided into NAA cruise operations, Europe cruise operations, Cruise Support, and Tour and Other.
1. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 70
Delta Air Lines, Inc. (NYSE:DAL) is one of the most undervalued travel stocks to buy according to hedge funds. Reuters reported on January 27 that Delta Air Lines, Inc. (NYSE:DAL) announced plans to purchase 31 Airbus widebody jets, supporting its long-term goal to modernize its international fleet and support future growth with a focus on demand from high-income and corporate travelers. The order includes 15 A350-900s and 16 A330-900s, and deliveries are expected to begin in 2029.
Reuters further reported that the new Airbus jets would be employed for medium- and long-haul flights, including recently announced or launched services to Hong Kong, Taipei, Melbourne, and Riyadh.
In another development, Bank of America Securities reaffirmed a Buy rating on Delta Air Lines, Inc. (NYSE:DAL) and set a price target of $80.00 on January 16. Following a detailed discussion with the company’s CFO, the firm stated that the company stands out as a clear leader in the airline sector, supported by encouraging factors such as modest leverage, strong cash generation, emphasis on premium revenue, and diversified income streams, such as loyalty and maintenance operations. Bank of America Securities sees the company’s 2026 earnings guidance as deliberately cautious, given macroeconomic uncertainty, adding that the underlying demand remains healthy.
Delta Air Lines, Inc. (NYSE:DAL) provides scheduled air transportation services for cargo and passengers. The company’s operations are divided into Airline and Refinery segments, with the Airline segment offering scheduled air transportation for passengers and cargo, and the Refinery segment providing jet fuel to the airline segment.
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