Travel Stocks Takeoff on Wall Street
The great subprime recession is over. Federal Reserve Chief Bernanke says so. Wall Street says so. Airlines are gearing up for a massive recovery. Hotel stocks are getting buy ratings from analysts. Vegas is back. Travel stocks across the board are zooming into the stratosphere, and we’re now in the initial stages of a sustained recovery.
Ben Bernanke, Federal Reserve Chairman, keynote address at Brookings Institution - “From a technical perspective, the recession is very likely over at this point.”
Comparison Chart for Hotel Stocks - Source: Yahoo Finance
Yahoo Finance - Citi Analyst Michael Bilerman initiates coverage of several hotel stocks – Choice Hotels (NYSE: CHH), LaSalle Hotel (NYSE: LHO), Marriott (NYSE: MAR), and Starwood Hotels (NYSE: HOT) with a Buy rating. Shares of Marriott gained $1.16, or 4.5 percent, to $26.76 in afternoon trading. Starwood’s stock added $1.25, or 3.8 percent, to $33.85, while shares of Choice Hotels surged $1.28, or 4.2 percent, to $31.77
CNNMoney - The Dow Jones Transportation average hit a new high for the year in mid-August and has continued to climb since then, closing above the 4,000 level on Monday for the first time since November.
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Comparison Chart for Airline Stocks - Source - Yahoo Finance
Bloomberg News – Airline stocks rallied for a ninth day, the longest streak since 1995, following forecasts from JPMorgan Chase & Co. and Delta Air Lines Inc. that the economic rebound will boost travel spending. The AMEX Airline Index jumped 3.8 percent to 28.63 in New York, bringing its climb since Sept. 2 to 26 percent.
Stock Comparison of Vegas Casino Companies - Source: Yahoo Finance
iStockAnalyst – Vegas is back. MGM Mirage (NYSE:MGM) was the third most popular stock listed on the NYSE last friday. Las Vegas Sands decides to suspend its earlier plan to layoff 4,000 employees in Macau by this autumn. MGM’s colossal 18m sq. ft. CityCenter Project is proceeding on schedule and will open in phases beginning on Dec. 1.
wRatings – Listing of ‘Most Competitive Travel & Transport companies for 2009? – The biggest mover is Vail Resorts (NYSE: MTN) rising from #75 to #12 in 2009, possibly indicating a turn of the tide in consumer spending.
Bloomberg News - A measure of travel and leisure companies [in Europe] rose 8.3 percent, the biggest gain among the 19 industries in the Stoxx 600. Whitbread Plc, the owner of the Premier Inn budget-hotel chain, rallied 24 percent and the company said it would meet profit estimates.
How long will this sustained recovery last? The least that can be said – at this stage, and based on the above trends - is that the rest of 2009 is going to be a steady climb for travel stocks, and the 4th quarter results will reflect the uptick in demand.