Displaying items by tag: travel

(Atlanta)

Many Airlines saw increases in stock prices on Monday as increases in bookings for spring and summer leisure trips…see the full story on our partner Magnifi’s site

(New York)

Where do you stand on airlines? Your opinion is worth about as much as the whole market’s—nobody is quite sure what to make of the future of air travel right now. Airlines had seen rising passenger numbers, but that has been tapering off as COVID cases have been rising again. Delta announced dreadful earnings yesterday, with revenue down 88% and net losses worth $4.33 per share. Thy also announced they were cutting their flight additions for August in half because of the rise in cases. The earnings come alongside a bleak announcement from United, which said “it's increasingly likely that travel demand will not return to normal until there is a widely available treatment or vaccine."

FINSUM: Have airline stocks come back too far? It looks there is likely to be at last another ugly 18 months as we await a vaccine.

(New York)

Morgan Stanley says the big gains in travel stocks are way overblown and will likely prove dangerous to investors. Carnival, Royal Caribbean, and Norwegian have all seen their shares rise in the double digits recently as investors have grown increasingly optimistic about their prospects and their cash reserves. However, Morgan Stanley threw cold water on those sentiments, saying “The cruise industry will take longer than almost any other form of travel to return to normal” as it downgraded the stocks to Underweight (two of them were already Underweight). UBS also pointed out that there will likely be no meaningful cruise activity until next year.

FINSUM: Even once cruises get running again, all it will take is one minor flourish of COVID—and the associated news cycle—for the whole sector to freeze up again. Too risky to invest in at this point.

(New York)

We have ben warning for weeks that as the coronavirus continued to spread, airline and other travel stocks would continue to be wounded (and likely not recover soon). That is happening n a big way today as news of a quarantine in Italy sent markets into a panic about the spread of the disease beyond China. Cruise ships and airline stocks are taking body blows as a result, with Delta and American down 7% and 10% respectively.

FINSUM: These are massive losses, and the worst part about it is that there is unlikely to be a “V” shaped recovery in these sectors, as it will take some time for the public’s fear of the virus (and thus travel) to wane even after things start to get better.

(New York)

Coronavirus fears continue to stalk markets. Just when it seems like it might be getting better, more news comes out to hurt markets. With that in mind, there are three sectors investors need to avoid because they will likely not recover from coronavirus for quite some time. Travel and tourism stocks are the main ones to avoid. Large US airlines have canceled all flights to the Chinese mainland until March and so far the estimate is that 13 million flights have been canceled. Cruse ships and other stocks that cater to tourists (even luxury retailers) are also likely to stay hurt for some time. Consider that even when the immediate panic over the virus dissipates, attitudes may have change and travel may not immediately recover.

FINSUM: We think the idea of behaviors changing is quite a valid one. For instance, one of the big worries within the Chinese stock market is that people may not continue to eat at restaurants because of general fears about infection.