As the consumer discretionary sector starts to shine again, with 23 companies sitting atop the coveted Zack Rank #1 (Strong Buy) list, the upcoming spring and summer seasons promise potential growth for investors. Within this sector, Zacks Leisure and Recreation Services Industry is garnering attention, making it worth looking into two highly ranked stocks that are poised to thrive in the forthcoming season.
Image Source: Zacks Investment Research
Royal Caribbean Cruises (RCL)
Miami-based Royal Caribbean Cruises, with the title for the world’s largest cruise ship, Wonder of the Seas, holds a prominent place. Boasting 26 cruise ships, including popular vessels like Harmony of the Seas and Oasis of the Seas, the company has demonstrated consistent growth, with RCL shares surging +59% over the last year, despite a minor year-to-date dip of -10%. Projections for fiscal 2024 earnings forecast an impressive climb of 42% to $9.65 per share. Moreover, the estimated FY25 EPS is set to expand by 19% to $11.54 per share, highlighting its promising trajectory.
Image Source: Zacks Investment Research
Royal Caribbean’s stock stands out not only due to its impressive growth but also its attractive valuation, with RCL shares trading at 12.2X forward earnings and 1.9X forward sales. The Average Zacks Price Target of $135.21 a share further implies a potential 15% upside from current levels, offering an enticing opportunity for investors.
Image Source: Zacks Investment Research
Trip.com (TCOM)
Trip.com, a China-based travel service company catering to the massive population of the People’s Republic, is positioned well for substantial growth. The company anticipates high double-digit growth on both top and bottom lines, making its stock an appealing prospect. At 14.7X forward earnings, its valuation is becoming more reasonable.
Image Source: Zacks Investment Research
Annual earnings for Trip.com are projected to skyrocket by 714% to $2.36 per share as it closes FY23, compared to $0.29 per share in 2022. Additionally, FY24 EPS is expected to increase by a further 18%, painting a positive growth trajectory for the company.
Image Source: Zacks Investment Research
The company’s impressive sales growth is making its future earnings potential increasingly attractive, propelling it to a level where it can be compared with Expedia. The current projections indicate a 110% climb in sales for FY23 to $6.2 billion, compared to $2.94 billion in 2022. Moreover, sales are forecasted to leap by another 18% in FY24 to $7.3 billion, strengthening its position in the market.
Image Source: Zacks Investment Research
Bottom Line
Earnings estimates for Royal Caribbean and Trip.com are showing promising signs, with the approaching spring likely to act as a further catalyst for growth. As we anticipate a return to normalcy in the upcoming summer travel season, both companies are poised to capitalize on their post-pandemic growth and recovery, making it an opportune moment for investors to consider these stocks.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.0% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
Trip.com Group Limited Sponsored ADR (TCOM) : Free Stock Analysis Report
Expedia Group, Inc. (EXPE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
