The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how American Airlines (NASDAQ:AAL) and the rest of the travel and vacation providers stocks fared in Q1.
Airlines, hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.
The 19 travel and vacation providers stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 4.6% above.
Luckily, travel and vacation providers stocks have performed well with share prices up 11.7% on average since the latest earnings results.
American Airlines (NASDAQ:AAL)
One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ:AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
American Airlines reported revenues of $12.55 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA estimates and EPS guidance for next quarter missing analysts’ expectations.
“The actions American has taken over the past several years to refresh our fleet, manage costs and strengthen our balance sheet position us well for the uncertainty our industry is facing,” said American’s CEO Robert Isom.
The stock is up 25.5% since reporting and currently trades at $11.70.
Read our full report on American Airlines here, it’s free.
Best Q1: Lindblad Expeditions (NASDAQ:LIND)
Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ:LIND) offers cruising experiences to remote destinations in partnership with National Geographic.
Lindblad Expeditions reported revenues of $179.7 million, up 17% year on year, outperforming analysts’ expectations by 18.8%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Lindblad Expeditions achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 17.6% since reporting. It currently trades at $10.71.
Is now the time to buy Lindblad Expeditions? Access our full analysis of the earnings results here, it’s free.
Slowest Q1: Hilton Grand Vacations (NYSE:HGV)
Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE:HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.
Hilton Grand Vacations reported revenues of $1.15 billion, flat year on year, falling short of analysts’ expectations by 7.6%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
Hilton Grand Vacations delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 15.7% since the results and currently trades at $38.90.
Read our full analysis of Hilton Grand Vacations’s results here.
Marriott Vacations (NYSE:VAC)
Spun off from Marriott International in 1984, Marriott Vacations (NYSE:VAC) is a vacation company providing leisure experiences for travelers around the world.
Marriott Vacations reported revenues of $1.2 billion, flat year on year. This result came in 0.7% below analysts' expectations. Aside from that, it was a strong quarter as it produced a solid beat of analysts’ EPS estimates and a decent beat of analysts’ EBITDA estimates.
The stock is up 16.9% since reporting and currently trades at $68.02.
Read our full, actionable report on Marriott Vacations here, it’s free.
Choice Hotels (NYSE:CHH)
With almost 100% of its properties under franchise agreements, Choice Hotels (NYSE:CHH) is a hotel franchisor known for its diverse brand portfolio including Comfort Inn, Quality Inn, and Clarion.
Choice Hotels reported revenues of $332.9 million, flat year on year. This number missed analysts’ expectations by 4%. Overall, it was a slower quarter as it also produced a miss of analysts’ adjusted operating income and EPS estimates.
The stock is up 3.9% since reporting and currently trades at $130.77.
Read our full, actionable report on Choice Hotels here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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