BKNG: 3 Travel-Related Stocks on the Road to Recovery

The global travel industry is undergoing a transformative period fueled by technological advancements, increased consumer spending on experiences, and the expansion of international routes. The resurgence in business travel and the rise of experiential tourism are driving robust growth across airlines, hotels, and other travel-related sectors.

Therefore, investors looking to capitalize might consider investing in top travel stocks such as Booking Holdings Inc. (BKNG), Expedia Group, Inc. (EXPE), and Air Canada (ACDVF) for potential long-term growth.

As per the Deloitte holiday travel survey, half of Americans plan to travel between Thanksgiving and mid-January, driven by factors like higher income and spending trends on travel. The share of going abroad for trips has also risen to 42% compared to 29% in 2023. Further, AAA expected over 119 million people to travel for the New Year, exceeding the holiday season record in 2019. Meanwhile, the TSA predicted screening of 40 million airline passengers over the holidays.

In November 2024, personal income rose by $71.1 billion (0.3% monthly), and disposable personal income increased by $61.1 billion (0.3%). An increase in personal income generally leads to an increase in travel as people have more disposable income to spend on leisure activities, including travel. Moreover, the travel and tourism market in the United States is projected to reach $265.50 billion by 2029, exhibiting a CAGR of 4.4%.

Considering these conducive trends, let’s examine the fundamentals of the three travel stock picks.

Booking Holdings Inc. (BKNG)

BKNG provides travel and restaurant online reservations and related services worldwide. The company offers online accommodation, travel reservations, rental car reservation services, and vacation packages through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable.

In terms of the trailing-12-month net income margin, BKNG’s 21.85% is 398.9% higher than the 4.38% industry average. Similarly, its 31.81% trailing-12-month levered FCF margin is 607.4% higher than the industry average of 4.50%. Also, its trailing-12-month ROTA of 18% compares to the industry average of 3.84%.

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For the fiscal third quarter, which ended on September 30, 2024, BKNG’s total revenues increased 8.9% year-over-year to $7.99 billion, while its operating income rose 2.4% from the year-ago value to $3.18 billion. The company’s adjusted net income amounted to $2.84 billion and $83.89 per share, up 9.2% and 16% from the prior-year quarter, respectively. Also, its adjusted EBITDA grew 11.6% from the prior-year quarter to $3.67 billion.

The consensus revenue estimate of $5.18 billion for the fiscal fourth quarter (ended December 2024) represents an 8.4% increase year-over-year. The consensus EPS estimate of $36.02 for the about-to-be-reported quarter indicates a 12.6% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Over the past nine months, the stock has gained 35.3%, closing the last trading session at $4,778.81.

BKNG’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

BKNG has an A grade for Quality and a B for Sentiment. It is ranked #12 in the 48-stock A-rated Internet industry. Click here to see the additional ratings for BKNG (Growth, Value, Momentum, and Stability).

Expedia Group, Inc. (EXPE)

EXPE is a global online company operating through three segments: B2B; B2C; and Trivago. Its extensive portfolio of brands includes Expedia, Hotels.com, Vrbo, Orbitz, CheapTickets, ebookers, Hotwire, and CarRentals.com.

On October 29, EXPE and Microsoft announced a new strategic partnership that offers Bing users additional rewards on bookings powered by Expedia. Also, through Rapid API, Microsoft Bing users will benefit from Expedia Group’s seamless end-to-end booking experience.

The stock’s trailing-12-month gross profit margin of 89.19% is 135.5% higher than the industry average of 37.88%. Similarly, its 71.25% trailing-12-month ROCE is 539.4% above the industry average of 11.14%. Also, its trailing-12-month ROTA of 4.56% compares favorably to the industry average of 18.82%.

EXPE’s revenue for the third quarter ended September 30, 2024, increased 3.3% year-over-year to $4.06 billion. Moreover, the company’s adjusted attributable net income attributable and EPS amounted to $809 million and $6.13, reflecting an increase of 4% and 13.3% from year-ago value, respectively. Also, its adjusted EBITDA stood at $1.25 billion, up 2.8% year-over-year.

Street expects EXPE’s revenue for the fourth quarter (ended December 2024) to increase 6.4% year-over-year to $3.07 billion, while its EPS for the same period is expected to grow 21.9% from the prior year to $2.10. Moreover, the company topped the revenue and EPS estimates in three of the trailing four quarters, which is impressive.

The stock has gained 40.4% over the past nine months and 23.3% over the past year to close the last trading session at $183.19.

EXPE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

It has an A grade for Quality and a B for Value. Out of 48 stocks in the Internet industry, it is ranked #3. Beyond what is stated above, we have also rated EXPE for Growth, Momentum, Stability, and Sentiment. Get all the EXPE ratings here.

Air Canada (ACDVF)

Based in Saint-Laurent, Canada, ACDVF provides domestic, U.S. transborder, and international airline services. The company offers scheduled passenger services under the Air Canada Vacations and Air Canada Rouge brand names.

On December 12, ACDVF announced its plans to roll out fast, free streaming-quality Wi-Fi, sponsored by Bell. At the beginning of May 2025, this service will be available to Aeroplan Members on Wi-Fi-equipped aircraft for flights within North American and Sun markets, along with free Wi-Fi service to long-haul international routes in 2026.

ACDVF’s trailing-12-month ROCE and ROTA of 139.92% and 8.09% are 925.7% and 52.2% higher than their respective industry averages of 13.64% and 5.31%. Likewise, its trailing-12-month net income margin of 11.57% is 77.2% above the industry average of 6.53%.

During the third quarter ended September 30, 2024, ACDVF reported operating revenue of CAD6.11 billion ($4.38 billion). Its net income of CAD2.03 billion ($1.46 billion) indicates growth of 62.8% from the prior year’s quarter, and its EPS came in at CAD5.38, up 74.7% year-over-year. In addition, the free cash flow grew 108.9% year-over-year to CAD282 million ($202.20 million).

Analysts expect ACDVF’s revenue for the fiscal year (ended December 2024) to be $15.27 billion and $2.49, respectively. For the fiscal year 2025, its revenue is expected to grow by 4.9% from the prior year to $16.02 billion.

Shares of ACDVF have surged 18.9% over the past three months and 16.7% over the past six months to close the last trading session at $14.82.

ACDVF’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It has an A grade for Value and Quality. The stock is ranked first out of 25 stocks in the B-rated Airlines industry. Click here to see the ACDVF ratings for Growth, Momentum, Stability, and Sentiment.

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BKNG shares were trading at $4,820.06 per share on Wednesday afternoon, up $41.25 (+0.86%). Year-to-date, BKNG has declined -2.99%, versus a 1.27% rise in the benchmark S&P 500 index during the same period.