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4 Leisure Stocks Poised to Beat Earnings Estimates in Q3
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The leisure industry is likely to have benefited from robust demand for recreational products and golf business. Heightened golfer participation from existing and new participants is likely to have driven the golf industry.
Of late, the golf industry has been gaining from a high participation by millennials. Technology has also been playing a vital role in reshaping the sport. India and China have popped up as two of the largest emerging golf markets. However, golf equipment sales have slowed in recent months. Per the NPD data, sales across June, July and August 2021 were down 2% year over year. Nevertheless, the figures shot up 50% from 2019 levels. We believe that macroeconomic hurdles like supply chain constraints, freight cost, staffing challenges and inflationary pressure are likely to have influenced the pace of growth in the to-be-reported quarter.
The boat industry continues to focus on consumer experience, digital marketing, operational excellence and human capital development to drive growth. Although pandemic-induced lockdowns and restricted movement were a roadblock, the ship, boat building and repairing market displayed enough resilience to overcome the same. Notably, boat sales have been going through the roof since April-end last year and some dealers are hard pressed to supply. Per ResearchAndMarkets report, the boat repairing market is likely to increase from $219.23 billion in 2020 to $234.41 billion in 2021, witnessing a CAGR of 6.9%. The market is expected to reach $282.75 billion in 2025 at a CAGR of 5%.
The cruise industry is gaining traction on the back of its staycation offerings. Although the Delta variant and its corresponding effect on consumer confidence have created many operating challenges, bookings for most of the companies remain strong for the remainder of 2021 and the first half of 2022. The companies are focusing on additional testing and indoor mask applications (under the CDC's vaccination requirements), prioritizing health and safety of its guests as well as employees.
The theme park industry is likely to have benefitted from a strong consumer-spending backdrop along with the absence of constraints in park capacity and ride seating (particularly in the United States). Also, emphasis on offerings such as touchless payment systems for in-park purchases (including tickets), digital queues and self-pay systems for food orders are initiatives placed in the right direction. We believe that there is more upside potential as the companies continue to monitor additional business development opportunities and focus on adapting to customer-preference trends.
How to Make the Right Pick?
Given the wide range of companies in this space, the task is by no means easy. While it is impossible to be sure of the outperformers, our proprietary methodology — a positive Earnings ESP along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Our Choices
Here are a few leisure companies that investors can take a look at.
Clarus Corporation (CLAR - Free Report) has a Zacks Rank #2 and an Earnings ESP of +23.96%. The Zacks Consensus Estimate for third-quarter 2021 earnings is pegged at 48 cents per share, suggesting a rise from earnings of 30 cents reported in the prior-year quarter. Earnings estimates for the to-be-reported quarter have been revised 45.5% upward in the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMC Entertainment Holdings, Inc. (AMC - Free Report) has an Earnings ESP of +9.15% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2021 bottom line is at a loss of 47 cents per share, calling for an improvement from a loss of $5.70 reported in the prior-year quarter. The estimates for the current quarter have been revised 2.1% upward in the past 30 days.
AMC Entertainment Holdings, Inc. Price and EPS Surprise
Bluegreen Vacations Holding Corporation has an Earnings ESP of +3.03% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2021 bottom line is pegged at 66 cents per share, indicating an improvement from a loss of $1.53 reported in the year-ago quarter. Its earnings estimates for the to-be-reported quarter have been revised 3.1% upward in the past 30 days.
Bluegreen Vacations Holding Corporation Price and EPS Surprise
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has a Zacks Rank #3 and an Earnings ESP of + 19.84%. The Zacks Consensus Estimate for third-quarter 2021 bottom line is pegged at a loss of $2.11, which suggests an improvement of 10.2% from a loss of $2.35 reported in the prior-year quarter.
Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise
Image: Bigstock
4 Leisure Stocks Poised to Beat Earnings Estimates in Q3
The leisure industry is likely to have benefited from robust demand for recreational products and golf business. Heightened golfer participation from existing and new participants is likely to have driven the golf industry.
Of late, the golf industry has been gaining from a high participation by millennials. Technology has also been playing a vital role in reshaping the sport. India and China have popped up as two of the largest emerging golf markets. However, golf equipment sales have slowed in recent months. Per the NPD data, sales across June, July and August 2021 were down 2% year over year. Nevertheless, the figures shot up 50% from 2019 levels. We believe that macroeconomic hurdles like supply chain constraints, freight cost, staffing challenges and inflationary pressure are likely to have influenced the pace of growth in the to-be-reported quarter.
The boat industry continues to focus on consumer experience, digital marketing, operational excellence and human capital development to drive growth. Although pandemic-induced lockdowns and restricted movement were a roadblock, the ship, boat building and repairing market displayed enough resilience to overcome the same. Notably, boat sales have been going through the roof since April-end last year and some dealers are hard pressed to supply. Per ResearchAndMarkets report, the boat repairing market is likely to increase from $219.23 billion in 2020 to $234.41 billion in 2021, witnessing a CAGR of 6.9%. The market is expected to reach $282.75 billion in 2025 at a CAGR of 5%.
The cruise industry is gaining traction on the back of its staycation offerings. Although the Delta variant and its corresponding effect on consumer confidence have created many operating challenges, bookings for most of the companies remain strong for the remainder of 2021 and the first half of 2022. The companies are focusing on additional testing and indoor mask applications (under the CDC's vaccination requirements), prioritizing health and safety of its guests as well as employees.
The theme park industry is likely to have benefitted from a strong consumer-spending backdrop along with the absence of constraints in park capacity and ride seating (particularly in the United States). Also, emphasis on offerings such as touchless payment systems for in-park purchases (including tickets), digital queues and self-pay systems for food orders are initiatives placed in the right direction. We believe that there is more upside potential as the companies continue to monitor additional business development opportunities and focus on adapting to customer-preference trends.
How to Make the Right Pick?
Given the wide range of companies in this space, the task is by no means easy. While it is impossible to be sure of the outperformers, our proprietary methodology — a positive Earnings ESP along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Our Choices
Here are a few leisure companies that investors can take a look at.
Clarus Corporation (CLAR - Free Report) has a Zacks Rank #2 and an Earnings ESP of +23.96%. The Zacks Consensus Estimate for third-quarter 2021 earnings is pegged at 48 cents per share, suggesting a rise from earnings of 30 cents reported in the prior-year quarter. Earnings estimates for the to-be-reported quarter have been revised 45.5% upward in the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clarus Corporation Price and EPS Surprise
Clarus Corporation price-eps-surprise | Clarus Corporation Quote
AMC Entertainment Holdings, Inc. (AMC - Free Report) has an Earnings ESP of +9.15% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2021 bottom line is at a loss of 47 cents per share, calling for an improvement from a loss of $5.70 reported in the prior-year quarter. The estimates for the current quarter have been revised 2.1% upward in the past 30 days.
AMC Entertainment Holdings, Inc. Price and EPS Surprise
AMC Entertainment Holdings, Inc. price-eps-surprise | AMC Entertainment Holdings, Inc. Quote
Bluegreen Vacations Holding Corporation has an Earnings ESP of +3.03% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2021 bottom line is pegged at 66 cents per share, indicating an improvement from a loss of $1.53 reported in the year-ago quarter. Its earnings estimates for the to-be-reported quarter have been revised 3.1% upward in the past 30 days.
Bluegreen Vacations Holding Corporation Price and EPS Surprise
Bluegreen Vacations Holding Corporation price-eps-surprise | Bluegreen Vacations Holding Corporation Quote
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has a Zacks Rank #3 and an Earnings ESP of + 19.84%. The Zacks Consensus Estimate for third-quarter 2021 bottom line is pegged at a loss of $2.11, which suggests an improvement of 10.2% from a loss of $2.35 reported in the prior-year quarter.
Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise
Norwegian Cruise Line Holdings Ltd. price-eps-surprise | Norwegian Cruise Line Holdings Ltd. Quote