inflation showed signs of cooling in July, with prices up 8.5% from a year ago, less than expected, and down 0.6% from June’s peak. Consequently, travel demand is expected to increase ahead of the Labor Day weekend.
“Prices will probably drop a bit between now and mid-October. you you’ll want to book your vacation trip until that second week of October,” said Haley Berg, chief economist for Hopper.
Additionally, according to Tripadvisor’s Fall Index survey, about 37% of Americans still prefer to travel as planned this fall, regardless of inflation. Also, revenue is expected in the travel and tourism industry to grow at a CAGR of 8.5% from 2022 to 2026.
Given the backdrop, it might be wise to add solid travel stock Bluegreen Vacations Holding Corporation (BVH), Playa Hotels & Resorts NV (PLEA), and Target Hospitality Corp. (TH) in your portfolio as inflation cools.
Bluegreen Vacations Holding Corporation (BVH)
BVH operates as a vacation ownership company. Lists and sells vacation ownership interests (VOIs) and manages resorts in leisure and urban destinations. The company’s network includes 45 club resorts, 23 club companion resorts and 128 Bass Pro Shops and Cabela’s stores.
On August 3, 2022, Alan B. Levan, Chairman and CEO of BVH, said: “Overall, demand for vacations from Bluegreen Vacation Club owners has been strong, and we believe that our core strategy of primarily offering a network of ‘driving towards’ resorts will continue to serve as a driver of growth.”
BVH’s total revenue reached $235.60 million for the second quarter ended June 30, 2022, up 21.8% year over year. Its free cash flow grew 35.6% year over year to $61.05 million. Additionally, the company’s VOI sales increased 57.1% year-over-year to $144.26 million.
Analysts expect BVH’s revenue to grow 16.5% year-over-year to $882.17 million in the current year. Its EPS is estimated to grow 32.3% year-over-year to $3.69 in 2022. Over the past year, the stock has gained 15.8% to close the last trading session at $23.90 .
BVHs POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a strong buy in our proprietary rating system. The POWR ratings evaluate stocks on 118 different factors, each with its own weight.
BVH has an A in value and quality and a B in feel. Within the B rating Travel – Hotels/Resorts industry, it ranks #1 among 21 stocks. Click here to see additional POWR current, growth and stability ratings for BVH.
Playa Hotels & Resorts NV (PLEA)
PLYA and its subsidiaries own, develop and operate resorts in prime beachfront locations in Mexico and the Caribbean. The company operates a portfolio of 22 resorts with 8,366 rooms located in Mexico, Jamaica and the Dominican Republic.
On August 2, 2022, PLYA entered into an agreement to take over the management of the popular family resort Seadust Cancun in Mexico. This collaboration highlights PLYA’s position as a key player in hospitality management.
PLYA’s total revenue reached $221.27 million for the second quarter ended June 30, 2022, up 71.8% year over year. Its adjusted EBITDA grew 169.3% year over year to $61.70 million. Additionally, the company’s net income reached $30.50 million, compared to a net loss of $7.80 million in the year-ago period.
The Street expects PLYA’s revenue to grow 56.5% year over year to $836.60 million in the current year. Its EPS is estimated to grow 200% year-over-year to $0.48 in 2022. Over the past month, the stock has gained 13.3% to close the last trading session at $7.33.
PLYA has an overall rating of B, equal to a Buy in our POWR Ratings system. It has an A for sentiment and a B for quality, growth and value. It is ranked #2 in the same industry. Beyond what was said above, we also rated PLYA for Momentum and Stability. Get all PLYA ratings here.
Target Hospitality Corp. (TH)
TH operates as a specialty rental and hospitality services company in North America. The company operates in four segments – Hospitality Services & Facilities – South; Hospitality Services & Facilities – Midwest; Government; and TCPL Keystone.
TH’s total revenue reached $109.65 million for the second quarter ended June 30, 2022, up 46.2% year over year. Its net income came in at $22.85 million, compared to a loss of $912,000 in the year-ago period. The company is regulated EBITDA reached $56.12 million, an increase of 75.7% year-over-year.
TH’s revenue is expected to grow 75% year-over-year to $509.80 million in the current year, while its EPS is estimated to grow 2,840% year-over-year to $1.37. Over the past year, the stock has gained 329.1% to close the last trading session at $14.16.
TH has an overall rating of B, equal to a Buy in our POWR Ratings system. It has a grade of B in Height, Feel and Quality. It ranks #3 in the same industry. We’ve also rated TH for momentum, stability and value. Get all TH ratings here.
Shares of BVH traded at $23.37 per share on Friday afternoon, down $0.53 (-2.22%). Year-to-date, BVH is down -32.63%, versus a -10.48% gain in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. More…