5 Best Travel Stocks To Buy Right Now

In this article, we discuss 5 best travel stocks to buy right now. If you want to see more stocks in this selection, check out 11 Best Travel Stocks To Buy Right Now. 

5. Royal Caribbean Cruises Ltd. (NYSE:RCL)

Number of Hedge Fund Holders: 42

Royal Caribbean Cruises Ltd. (NYSE:RCL) is a Florida-based company that operates cruises under the Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises brands, which cover approximately 1,000 destinations. Royal Caribbean Cruises Ltd. (NYSE:RCL) is one of the best travel stocks to consider. On December 19, the company announced a partnership with fund iCON Infrastructure Partners VI to develop strategic cruise port infrastructure. The proposed partnership will own, develop, and manage cruise terminal facilities and infrastructure in home ports and key ports of call, with Royal Caribbean Cruises Ltd. (NYSE:RCL) holding a 10% ownership stake. 

On December 15, Barclays analyst Brandt Montour raised the firm’s price target on Royal Caribbean Cruises Ltd. (NYSE:RCL) to $70 from $66 and kept an Overweight rating on the shares.

According to Insider Monkey’s third quarter database, 42 hedge funds reported owning stakes worth $491.3 million in Royal Caribbean Cruises Ltd. (NYSE:RCL), compared to 28 funds in the prior quarter worth $333 million. John W. Rogers’ Ariel Investments is a prominent investor in the company. 

Ariel Investment made the following comment about Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q3 2022 investor letter:

“Global cruise vacation company Royal Caribbean Cruises Ltd. (NYSE:RCL) also aided relative performance in the quarter. With the entire fleet returning to service in June, RCL delivered positive EBITDA and operating cash flow for the first time since the pandemic began. Forward booking commentary is also encouraging with both trends and pricing for 2023 ahead of 2019 levels. Though questions persist around the macro backdrop, RCL has an experienced executive management team with operational expertise at its helm, as well as a healthy liquidity position. Over the long term, we believe the headwinds travel and leisure are experiencing will soften and expect RCL’s fundamentals will prove resilient in the face of adversity. At today’s valuation, RCL is currently trading at a nearly -60% discount to our estimate of private market value.”

4. Las Vegas Sands Corp. (NYSE:LVS)

Number of Hedge Fund Holders: 48

Las Vegas Sands Corp. (NYSE:LVS) is a Nevada-based company that develops, owns, and operates integrated resorts in Asia and the United States. It owns and manages The Venetian Macao Resort Hotel, the Londoner Macao, The Parisian Macao, The Plaza Macao, Four Seasons Hotel Macao, Cotai Strip, the Sands Macao in Macau, and Marina Bay Sands in Singapore. On December 19, Las Vegas Sands Corp. (NYSE:LVS) highlighted its vision for the company’s next ten years in Macau after officially inking a new 10-year gaming concession. The company also plans to invest in non-gaming entertainment. 

On December 15, investment advisory Barclays raised the firm’s price target on Las Vegas Sands Corp. (NYSE:LVS) to $57 from $43 and reiterated an Overweight rating on the shares. Analyst Brandt Montour issued the ratings update. 

According to Insider Monkey’s data, 48 hedge funds were bullish on Las Vegas Sands Corp. (NYSE:LVS) at the end of Q3 2022, compared to 42 funds in the last quarter. Robert Pitts’ Steadfast Capital Management is a prominent stakeholder of the company, with 2.5 million shares worth $94.7 million. 

3. MGM Resorts International (NYSE:MGM)

Number of Hedge Fund Holders: 53

MGM Resorts International (NYSE:MGM) is a Nevada-based company that owns and operates casino, hotel, and entertainment resorts in the United States and Macau. The company operates through three segments – Las Vegas Strip Resorts, Regional Operations, and MGM China. MGM Resorts International (NYSE:MGM) is one of the best travel stocks to monitor. 

On December 19, MGM Resorts International (NYSE:MGM) announced that MGM Grand Paradise has been awarded a new 10-year gaming concession contract. As part of the agreement, MGM China will invest approximately $2 billion over the next decade, nearly 50% of which is expected to be treated as capital expenditure and 50% as operating expense. About 90% of this budget will be spent on the development of international tourist markets, non-gaming projects, and programming to increase diversification in the region.

Truist analyst Barry Jonas on December 5 upgraded MGM Resorts International (NYSE:MGM) to Buy from Hold with a price target of $50, up from $40. The analyst said that he had historically been more cautious with bear-case macro risks related to the Strip and destination markets, but he also forecasts relative outperformance in 2023 on the back of the Strip’s solid event calendar and returning midweek business travel. 

According to Insider Monkey’s data, 53 hedge funds were bullish on MGM Resorts International (NYSE:MGM) at the end of September 2022, compared to 46 funds in the last quarter. Keith Meister’s Corvex Capital is the biggest stakeholder of the company, with 6.6 million shares worth $198.3 million. 

Baron Funds made the following comment about MGM Resorts International (NYSE:MGM) in its Q3 2022 investor letter:

“MGM Resorts International (NYSE:MGM) is a leading global casino and entertainment company with 29 unique hotels and casinos including some of the most recognizable resort brands such as Bellagio, MGM Grand, ARIA, and Park MGM. At its recent price of only $30 per share, we believe MGM’s valuation is compelling at only 6 times 2023 estimated cash flow.”

2. Delta Air Lines, Inc. (NYSE:DAL)

Number of Hedge Fund Holders: 53

Delta Air Lines, Inc. (NYSE:DAL) is a Georgia-based company that provides air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. It is one of the leading travel stocks to consider. Delta Air Lines, Inc. (NYSE:DAL) expects passenger levels to increase approximately 5% to 9% in Q4 2022 as compared to the same period in 2019.  

On December 20, Citi analyst Stephen Trent raised the price target on Delta Air Lines, Inc. (NYSE:DAL) to $59 from $55 and kept a Buy rating on the shares. Delta Air Lines, Inc. (NYSE:DAL)’s combination of international route exposure, seat mile cost dilution, and relatively stable fuel prices should support the shares over the next year, the analyst wrote in a research note. The analyst continues to see Delta Air Lines, Inc. (NYSE:DAL) as his favorite U.S. carrier. 

According to Insider Monkey’s data, Delta Air Lines, Inc. (NYSE:DAL) was part of 53 public stock portfolios at the end of Q3 2022, compared to 49 in the prior quarter. Jim Simons’ Renaissance Technologies held the largest stake in the company, comprising 8.8 million shares worth $247.3 million. 

Here is what Miller Value Partners specifically said about Delta Air Lines, Inc. (NYSE:DAL) in its Q3 2022 investor letter:

“Delta Air Lines, Inc. (NYSE:DAL) ($29.42) is a high-quality airline (yes, there really is such a thing!).  It didn’t issue any equity in the pandemic. It focuses on delivering a superb customer experience and has brand loyalty (including a stable revenue stream from partner American Express, growing at 20%/ year). Maybe the best evidence: it’s managed to outperform the S&P 500 over the past decade despite a horrible pandemic ending point (+13.2% vs. 11.7%1 ). It trades for 4x 2024 earnings! If it eventually trades at Southwest’s historical valuation, it implies this stock should double as well.”

1. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 112

The Walt Disney Company (NYSE:DIS) is one of the best travel stocks to invest in. The company offers Disney Parks and Experiences worldwide, in addition to distributing media and entertainment content. Morgan Stanley analyst Benjamin Swinburne on December 12 maintained an Overweight rating on The Walt Disney Company (NYSE:DIS) but lowered the firm’s price target on the shares to $115 from $125. He trimmed his estimates to reflect updated FY23 guidance, which he views as “achievable even with current macro environment and linear pressures.” The return of Bob Iger as CEO offers the opportunity to reorganize Disney’s Media businesses to prioritize driving overall consolidated earnings growth, added the analyst. 

According to Insider Monkey’s data, 112 hedge funds were bullish on The Walt Disney Company (NYSE:DIS) at the end of the third quarter of 2022, compared to 109 funds in the last quarter. Ken Fisher’s Fisher Asset Management is a prominent stakeholder of the company, with 5.14 million shares worth $485 million. 

Here is what Third Point specifically said about The Walt Disney Company (NYSE:DIS) in its Q3 2022 investor letter:

“As disclosed in our Q2 letter, we reinitiated a significant position in The Walt Disney Company (NYSE:DIS) when the company retested its Covid lows earlier this year. At the current price, Disney is trading for little more than the stand-alone value of its Parks business and a mere 15x ’24 “street” consensus. The company remains early in its Direct to Consumer (“DTC”) transition with a leading market position, and yet the current stock price ascribes negligible value to the streaming business. We believe this is due to questions around the terminal economics of streaming, given large losses being generated today at Disney (>$1 billion dollars last quarter) and stagnating margins at peers such as Netflix. On the last earnings call, management highlighted three items that could lead to an inflection in DTC profitability over the next 12 months: a 38% price increase for Disney+ in the US; moderating growth in cash content expense; and an advertising tier for Disney+ launching in two months that can drive additional ARPU given high demand for the Disney brand amongst advertisers.

While the company has guided Disney+ achieving breakeven sometime within the fiscal year ending September 2024, the valuation suggests the market remains skeptical. Disney only trades at ~14x the $7 in earnings generated prior to the Fox acquisition, which implies investors don’t expect earnings to meaningfully exceed this figure in the coming years. Hence, the first value driver we highlighted in our last letter is the opportunity for management to optimize Disney’s cost base to drive earnings growth. We believe Disney has ample means to rationalize costs across its operating platform and deliver targeted content for home viewing that does not entail the same cost structure of exclusive theatrical releases…” (Click here to view the full text)

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