The Analysts Pile Into The Travel Recovery Story
As bad as the outlook for inflation and the economy is, the times are good for the travel industry. The travel industry has been shackled for the last 2+ years and is finally coming out of those dark times. The point is that blue-chip travel companies are getting noticed by the analyst, and for the better. If you are looking for a way to ride out the summer season, the airlines and travel industry may be the way to do it comfortably.
Q1 2022 hedge fund letters, conferences and more
United Airlines Pops In Wake Of Earnings
United Airlines (NASDAQ:UAL) popped in the wake of its Q1 release due to a very optimistic outlook. The stock shot up more than 10% aided by an upswing in analysts' sentiment but price action has since come down. What has not come down is the analyst's sentiment. At least 9 sell-side analysts upgraded, raised the price target, or both since the Q1 release and the sentiment is now a weak Buy. This is up in the 12, 3, and 1-month comparison and is likely to go higher as the spring wears on. The more interesting factoid is the Marketbeat.com consensus price target which is also up in all three comparisons and more than 50% above the current price action.
"The demand environment is the strongest it's been in my 30 years in the industry – and United and its customers will benefit more than any other airline,” CEO Scott Kirby said in his optimistic statement. “We're now seeing clear evidence that the second quarter will be an historic inflection point for our business. It leaves me more optimistic than ever about United's future."
Delta Airlines Is Another Contender For Game-Changing Results
Delta Airlines (NYSE:DAL) received 7 shout-outs post-earnings including 7 price target increases and 2 upgrades from Neutral to Buy, one a double-upgrade to Overweight. The new consensus price target is just shy of $53 or about 43% above the current price action and on the rise. Price action has pulled back, however, but is showing support at previously strong levels and is ready to move higher within the established range.
"Sentiment in Delta and other airline equities should turn more favorable as a rapid recovery in travel demand following the omicron wave more than offsets higher fuel prices and drives a near-recovery to pre-pandemic profitability levels," updated analyst Brandon Oglenski of Barclays when he upgraded to Overweight. "Delta’s focus on brand, premium products, and prudent balance sheet management has favorably positioned the carrier to meaningfully profit from the current strong rebound in US travel demand."
Booking.Com Has Your Ticket For Summer Travel
Booking.com (NASDAQ:BKNG) didn’t get any upgrades post-earnings but it was already rated a solid Buy. What it did get was 8 price target increases that have the Marketbeat.com consensus estimate up in the 1 and 12-month comparisons and more than 30% above the current share price. The wave of price target increases was driven by better than expected top and bottom-line results and a favorable outlook that is in line with United Airlines and Delta Airlines' forecast. Based on what the CEO of Booking.com is saying, it could be a record year for travel and one that lifts the entire sector to new highs.
"I am pleased to report a record $27 billion in gross bookings in the first quarter, the highest quarterly amount in our company’s history," CEO Glenn Fogel said. "Despite an uncertain macroeconomic environment, we have seen continued strengthening of global travel trends so far in the second quarter of 2022, and we are preparing for a busy summer travel season ahead.”
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Article by Thomas Hughes, MarketBeat
