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5 Leisure and Recreation Services Stocks to Invest In
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Wall Street has maintained its northbound journey in 2024 after an astonishing rally in 2023. The Leisure and Recreation Services industry, comprising cruise, entertainment and media owners, golf-related leisure and entertainment venue businesses, theme park makers, resort operators and event organizers, has seen good growth in the past year.
The Zacks-defined Leisure and Recreation Services Industry is currently in the top 25% of the Zacks Industry Rank. In the past year, the industry has provided 7.7% returns, while its one-month return is 3.6%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect this industry to outperform the market over the next three to six months.
Positive Catalysts
The cruise industry is benefiting from strong demand for cruising and accelerating booking volumes. The industry is witnessing solid bookings for North American and European sailings. Also, strong pricing (on closer-in-demand) and solid onboard spending bode well for the industry.
The theme park industry has been benefiting from robust demand. Theme park operators have been gaining from improving visitation. Consumer spending at theme parks continues to rise. Live entertainment firms have been benefiting from pent-up live event demand and robust ticket sales.
The Federal Reserve decided to keep interest rates unchanged. The Fed Chairman, Jerome Powell, clearly indicated that the regime of tighter monetary control is probably finished. This comes as inflation is decreasing gradually. Consequently, a reduction of the benchmark lending rate will reduce the borrowing costs for the industry.
Our Top Picks
We have narrowed our search to five leisure and recreation services stocks that have strong growth potential for 2024. These stocks have seen positive earnings estimate revisions in the past 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Royal Caribbean Cruises Ltd. (RCL - Free Report) has been benefiting from strong cruising demand from new and loyal guests and robust booking trends. Also, strength in consumer spending onboard and pre-cruise purchases bode well.
RCL emphasized investing in a modern digital travel platform to streamline the vacation booking process for customers and expand wallet share. Also, RCL emphasized new innovative ships and onboard experiences to boost its offering and deliver superior yields and margins.
Zacks Rank #1 Royal Caribbean Cruises has an expected revenue and earnings growth rate of 14.4% and 45.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past seven days.
Carnival Corp. & plc (CCL - Free Report) has been benefiting from improved booking trends, courtesy of solid demand, bundled package offerings and increased advertising activities. CCL has secured bookings for nearly two-thirds of its business for 2024, with significantly higher prices. Also, CCL’s focus on fleet-optimization initiatives bodes well.
Zacks Rank #2 Carnival has an expected revenue and earnings growth rate of 13.8% and more than 100%, respectively, for the current year (ending November 2024). The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days.
OneSpaWorld Holdings Ltd. (OSW - Free Report) operates health and wellness centers onboard cruise ships and at destination resorts worldwide. OSW’s health and wellness centers offer services, such as traditional body, salon, and skin care services and products, self-service fitness facilities, specialized fitness classes, personal fitness training, pain management, detoxifying programs, body composition analyses, weight management programs and products; and medi-spa services.
OSW provides its guests access to beauty and wellness brands, including ELEMIS, Kérastase, Restylane, BOTOX Cosmetic, Perlane, Thermage, CoolSculpting, truSculpt 3D, truSculpt iD, and Dysport, onboard cruises.
Zacks Rank #2 OneSpaWorld Holdings has an expected revenue and earnings growth rate of 7.8% and 14.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days.
Trip.com Group Ltd. (TCOM - Free Report) is a one-stop travel service company. TCOM’s service consists of Trip.com, Ctrip, Skyscanner and Qunar. TCOM’s platform includes mobile apps, websites and 24/7 customer service centers.
Zacks Rank #1 Trip.com Group has an expected revenue and earnings growth rate of 16.3% and 1.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days.
Madison Square Garden Sports Corp. (MSGS - Free Report) operates as a professional sports company in the United States. MSGS owns and operates a portfolio of assets that consists of the New York Knickerbockers of the National Basketball Association (NBA) and the New York Rangers of the National Hockey League. Its other professional franchises include two development league teams, the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League.
MSGS also owns Knicks Gaming, an esports franchise that competes in the NBA 2K League, as well as a controlling interest in Counter Logic Gaming, a North American esports organization. In addition, MSGS operates two professional sports team performance centers, the Madison Square Garden Training Center in Greenburgh.
Zacks Rank #2 Madison Square Garden Sports has an expected revenue and earnings growth rate of 1.9% and 11.6%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 30 days.
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5 Leisure and Recreation Services Stocks to Invest In
Wall Street has maintained its northbound journey in 2024 after an astonishing rally in 2023. The Leisure and Recreation Services industry, comprising cruise, entertainment and media owners, golf-related leisure and entertainment venue businesses, theme park makers, resort operators and event organizers, has seen good growth in the past year.
The Zacks-defined Leisure and Recreation Services Industry is currently in the top 25% of the Zacks Industry Rank. In the past year, the industry has provided 7.7% returns, while its one-month return is 3.6%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect this industry to outperform the market over the next three to six months.
Positive Catalysts
The cruise industry is benefiting from strong demand for cruising and accelerating booking volumes. The industry is witnessing solid bookings for North American and European sailings. Also, strong pricing (on closer-in-demand) and solid onboard spending bode well for the industry.
The theme park industry has been benefiting from robust demand. Theme park operators have been gaining from improving visitation. Consumer spending at theme parks continues to rise. Live entertainment firms have been benefiting from pent-up live event demand and robust ticket sales.
The Federal Reserve decided to keep interest rates unchanged. The Fed Chairman, Jerome Powell, clearly indicated that the regime of tighter monetary control is probably finished. This comes as inflation is decreasing gradually. Consequently, a reduction of the benchmark lending rate will reduce the borrowing costs for the industry.
Our Top Picks
We have narrowed our search to five leisure and recreation services stocks that have strong growth potential for 2024. These stocks have seen positive earnings estimate revisions in the past 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Royal Caribbean Cruises Ltd. (RCL - Free Report) has been benefiting from strong cruising demand from new and loyal guests and robust booking trends. Also, strength in consumer spending onboard and pre-cruise purchases bode well.
RCL emphasized investing in a modern digital travel platform to streamline the vacation booking process for customers and expand wallet share. Also, RCL emphasized new innovative ships and onboard experiences to boost its offering and deliver superior yields and margins.
Zacks Rank #1 Royal Caribbean Cruises has an expected revenue and earnings growth rate of 14.4% and 45.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past seven days.
Carnival Corp. & plc (CCL - Free Report) has been benefiting from improved booking trends, courtesy of solid demand, bundled package offerings and increased advertising activities. CCL has secured bookings for nearly two-thirds of its business for 2024, with significantly higher prices. Also, CCL’s focus on fleet-optimization initiatives bodes well.
Zacks Rank #2 Carnival has an expected revenue and earnings growth rate of 13.8% and more than 100%, respectively, for the current year (ending November 2024). The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days.
OneSpaWorld Holdings Ltd. (OSW - Free Report) operates health and wellness centers onboard cruise ships and at destination resorts worldwide. OSW’s health and wellness centers offer services, such as traditional body, salon, and skin care services and products, self-service fitness facilities, specialized fitness classes, personal fitness training, pain management, detoxifying programs, body composition analyses, weight management programs and products; and medi-spa services.
OSW provides its guests access to beauty and wellness brands, including ELEMIS, Kérastase, Restylane, BOTOX Cosmetic, Perlane, Thermage, CoolSculpting, truSculpt 3D, truSculpt iD, and Dysport, onboard cruises.
Zacks Rank #2 OneSpaWorld Holdings has an expected revenue and earnings growth rate of 7.8% and 14.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days.
Trip.com Group Ltd. (TCOM - Free Report) is a one-stop travel service company. TCOM’s service consists of Trip.com, Ctrip, Skyscanner and Qunar. TCOM’s platform includes mobile apps, websites and 24/7 customer service centers.
Zacks Rank #1 Trip.com Group has an expected revenue and earnings growth rate of 16.3% and 1.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days.
Madison Square Garden Sports Corp. (MSGS - Free Report) operates as a professional sports company in the United States. MSGS owns and operates a portfolio of assets that consists of the New York Knickerbockers of the National Basketball Association (NBA) and the New York Rangers of the National Hockey League. Its other professional franchises include two development league teams, the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League.
MSGS also owns Knicks Gaming, an esports franchise that competes in the NBA 2K League, as well as a controlling interest in Counter Logic Gaming, a North American esports organization. In addition, MSGS operates two professional sports team performance centers, the Madison Square Garden Training Center in Greenburgh.
Zacks Rank #2 Madison Square Garden Sports has an expected revenue and earnings growth rate of 1.9% and 11.6%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 30 days.