Stocks to buy

Wall Street Favorites: 3 Travel Stocks With Strong Buy Ratings for May 2024

Summer will be here before you know it. For many individuals and families, that means taking a vacation of some sort. Therefore, it could be worthwhile to look for travel stocks to buy.  

Despite expectations that the consumer hunger for travel is abating, the evidence shows a different picture. According to a survey of 2,000 U.S. Adults conducted by The Harris Poll for NerdWallet, approximately 45% of Americans plan to take a flight or stay in a hotel this summer. That means there could be over $400 billion spent on airfare and hotel costs alone this summer.  

In fairness, the survey also showed that approximately 22% of those surveyed cited inflation as a reason that they wouldn’t be traveling. And those that are traveling plan to pay for some or all of their travel with credit.

So, at this point, you have two choices. You can choose to do nothing. Or you can look for some attractive travel stocks to buy. If you choose the latter, here are three names that multiple analysts are rewarding with a strong buy rating.  

Delta Air Lines (DAL)

Source: EQRoy / Shutterstock.com

Despite a gain of nearly 60% in the last 12 months, shares of Delta Air Lines (NYSE:DAL) are still about 6% below their March 2020 levels. The market has been slow to embrace airline stocks in general despite record demand in the sector.  

However, Delta is making a case that’s hard to ignore. In April, they beat analysts’ expectations on the top and bottom line and both numbers were higher year-over-year (YOY). The company is forecasting strong demand for both international and business travel. After taking on debt in 2020, the airline is now forecasting free cash flow of $3.5 billion in 2024. Plus, in 2023, Delta reinstated the dividend it suspended in 2020.  

Out of 22 analysts to issue a rating on DAL stock, 18 have a strong buy rating. That speaks to the value they see in the stock. The consensus price target is over $60. InvestorPlace writer Will Ashworth points out the most bullish of those targets comes from Morgan Stanley (NYSE:MS) which has an $85 price target. As Ashworth notes, Delta has never traded higher than $70.  

Expedia Group (EXPE) 

building facade with expedia (EXPE) group logo

Source: VDB Photos / Shutterstock.com

In its most recent earnings report in May 2024, Expedia Group (NYSE:EXPE) reported slower revenue growth than what it recorded in the prior quarter. And, for the second consecutive quarter, EXPE stock tumbled sharply after an otherwise good earnings report.  

This could be a case of analysts expecting the travel boom to become a bust. But, as we noted in the introduction, that doesn’t seem to be the case. And that bodes well for Expedia which, in addition to being a travel planning site, is the host of VRBO and hotels.com. 

EXPE stock is covered by 36 analysts. Of those analysts, 12 give the stock a strong buy rating. And despite the 25% pullback in 2024, shareholders are still sitting on a 26% gain over the last 12 months. Analysts have a consensus price target of approximately $149 for the stock which is 32% above its closing price on May 13, 2024.  

Camping World (CWH) 

Camping World Holdings logo on a computer screen. CWH stock.

Source: Casimiro PT / Shutterstock

Camping World (NYSE:CWH) is one of the best-performing stocks in 2020 and 2021 as many Americans discovered or rekindled their desire for recreational vehicles (RVs). And the stock has held much of those gains. It’s up 89% in the last five years.

But, CWH stock is down 10% in the last 12 months. This makes sense because consumers who are looking to buy RVs are sensitive to interest rates. Earnings and revenue are down YOY.  

Also, the company cut its dividend, which was raised by nearly 500% between 2020 and 2021 is now below 2020 levels. While this is certainly a prudent move, it did take away one of the more compelling reasons to own the stock.  

Nevertheless, nine out of 12 analysts have a strong buy rating on the stock. And the consensus price target of $28.27 implies a 24.6% upside.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.

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