Leisure Stocks With Upward Estimate Revisions

This month’s Stocks First Cut screens for travel and leisure companies whose earnings estimates have been revised upward over the last month.

Airplanes are packed and highways are crowded. With the coronavirus pandemic fading in the rearview mirror, America is on the move again. This month’s First Cut screens for travel and leisure companies whose earnings estimates have been revised upward over the last month.

The last time we covered leisure and travel stocks with a First Cut was in May 2021, when pandemic restrictions were beginning to ease and there was cautious optimism but still headwinds for these stocks.

For the Fourth of July 2023 holiday period, the Transportation Security Administration (TSA) reported a record-breaking number of airline passengers, despite delays and cancellations that have plagued flights this year. According to Barron’s, cruise line stocks topped the S&P 500 index in the second quarter. The 2022 wedding boom is expected to continue through 2024, which is a boon for travel and leisure companies. Road trips have increased, which drives demand for quick meals at fast food restaurants. People love experiences and experiences make memories. So, companies benefiting from demand driven by the post-pandemic “fear of missing out” (FOMO) environment may be worth considering.

Our starting point for this First Cut uses AAII’s Stock Investor Pro fundamental stock screening and research database to filter for travel and leisure companies that have received any upward revisions over the course of the last month in their consensus earnings estimates from analysts for the current and next fiscal year. Stocks where analysts have lowered estimates for the current or next fiscal year during the past month were eliminated. Positive estimate revisions are made when analysts believe earnings will be higher than they previously expected.

Next, firms with less than three estimates for the current fiscal year were eliminated to help ensure that the revisions reflect a change in general consensus, and not a change by a single covering analyst. The 21 travel and leisure firms with the greatest percentage increase in their current fiscal-year estimate over the last month are listed in the table below.