Reflecting On Travel and Vacation Providers Stocks’ Q3 Earnings: Carnival (NYSE:CCL)

November 22, 2024 at 03:36 AM EST

CCL Cover Image

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at travel and vacation providers stocks, starting with Carnival (NYSE: CCL).

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 16 travel and vacation providers stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 0.9% below.

Luckily, travel and vacation providers stocks have performed well with share prices up 12.6% on average since the latest earnings results.

Carnival (NYSE: CCL)

Boasting outrageous amenities like a planetarium on board its ships, Carnival (NYSE: CCL) is one of the world's largest leisure travel companies and a prominent player in the cruise industry.

Carnival reported revenues of $7.90 billion, up 15.2% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ adjusted operating income estimates.

"We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led by high-margin, same-ship yield growth, driving a 26 percent improvement in unit operating income, the highest level we have reached in fifteen years," commented Carnival Corporation & plc's Chief Executive Officer Josh Weinstein.

Interestingly, the stock is up 36.8% since reporting and currently trades at $25.36.

Is now the time to buy Carnival? Access our full analysis of the earnings results here, it’s free.

Best Q3: Playa Hotels & Resorts (NASDAQ: PLYA)

Sporting a roster of beachfront properties, Playa Hotels & Resorts (NASDAQ: PLYA) is an owner, operator, and developer of all-inclusive resorts in prime vacation destinations.

Playa Hotels & Resorts reported revenues of $183.5 million, down 13.9% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 6.3% since reporting. It currently trades at $9.58.

Is now the time to buy Playa Hotels & Resorts? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Sabre (NASDAQ: SABR)

Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.

Sabre reported revenues of $764.7 million, up 3.3% year on year, falling short of analysts’ expectations by 1.4%. It was a slower quarter as it posted a significant miss of analysts’ EPS and airline bookings estimates.

Sabre delivered the weakest full-year guidance update in the group. As expected, the stock is down 12.6% since the results and currently trades at $3.60.

Read our full analysis of Sabre’s results here.

Hilton (NYSE: HLT)

Founded in 1919, Hilton Worldwide (NYSE: HLT) is a global hospitality company with a portfolio of hotel brands.

Hilton reported revenues of $2.87 billion, up 7.3% year on year. This print lagged analysts' expectations by 1.3%. Aside from that, it was a mixed quarter as it also produced a decent beat of analysts’ adjusted operating income estimates but EBITDA guidance for next quarter missing analysts’ expectations.

The stock is up 6.6% since reporting and currently trades at $253.81.

Read our full, actionable report on Hilton here, it’s free.

Travel + Leisure (NYSE: TNL)

Formerly known as Wyndham Destinations, Travel + Leisure (NYSE: TNL) is a global vacation company that provides travelers with vacation ownership, exchange, and travel services.

Travel + Leisure reported revenues of $993 million, flat year on year. This number lagged analysts' expectations by 1.8%. Zooming out, it was a mixed quarter as it also recorded a decent beat of analysts’ EPS estimates but a miss of analysts’ conducted tours estimates.

The stock is up 19.2% since reporting and currently trades at $54.16.

Read our full, actionable report on Travel + Leisure here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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