Zacks Industry Outlook Highlights Royal Caribbean Cruises, Carnival, Norwegian Cruise Line and Cinemark

For Immediate ReleaseChicago, IL – November 20, 2024 – Today, Zacks Equity Research discusses Royal Caribbean Cruises Ltd. RCL, Carnival Corp. & plc CCL, Norwegian Cruise Line Holdings Ltd. NCLH and Cinemark Holdings, Inc. CNK.Industry: Leisure & RecreationLink: https://www.zacks.com/commentary/2371955/4-stocks-to-buy-from-promising-leisure-recreation-services-industryThe Zacks Leisure and Recreation Services industry benefits from macroeconomic tailwinds, particularly the Federal Reserve's interest rate reduction. The industry has been gaining from optimizing business processes, consistent partnerships and digital initiatives. Robust demand for concerts, strong bookings for cruise operators and higher per capita spending at theme parks are supporting the industry. Firms like Royal Caribbean Cruises Ltd., Carnival Corp. & plc, Norwegian Cruise Line Holdings Ltd. and Cinemark Holdings, Inc. are likely to benefit from the trends mentioned above.Industry DescriptionThe Zacks Leisure and Recreation Services industry comprises various recreation providers, such as cruise, entertainment and media owners; golf-related leisure and entertainment venue businesses; and theme park makers, resort operators and event organizers. Some industry players have ski and sports businesses, while some operate health and wellness centers onboard cruise ships and at destination resorts.Many companies are engaged in hospitality and related businesses. A few industry participants also provide weight management products and services. These companies primarily thrive on overall economic growth, which fuels consumer demand for products. Demand, which is highly dependent on business cycles, is driven by a healthy labor market, rising wages and growing disposable income.3 Trends Shaping the Leisure & Recreation Services Industry's FutureInterest Rate Cut to Aid Leisure Industry: The Federal Reserve reduced interest rates for the second time this year, lowering the benchmark rate by 25 basis points to 4.5-4.75%. This follows a 50-basis-point reduction in September 2024. According to the Fed, economic activity continues to grow at a steady pace. Although the unemployment rate has moved up slightly, it remains low. Inflation has moderated closer to the Fed's target, though it still sits slightly above the desired levels.Robust Demand Helps Cruise Operators: The cruise industry is benefiting from strong demand for cruising and accelerating booking volumes. The industry is benefiting from solid bookings concerning North American and European sailings. Also, strong pricing (on closer-in-demand) and solid onboard spending bode well for the industry. According to the Cruise Lines International Association, the number of passengers embarking on cruises is projected to reach 35.7 million in 2024, suggesting an increase from 31.7 million in 2023.Theme Park Operators & Live Entertainment Companies Bouncing Back: The theme park industry is benefiting from robust demand. Theme park operators have been gaining from improving visitation. Consumer spending at theme parks continues to rise. The theme park sector is experiencing a boost from integrating technology, particularly through augmented and virtual reality. Live entertainment firms have benefited from pent-up live event demand and robust ticket sales.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Leisure and Recreation Services industry is grouped within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #22, which places it in the top 9% of 249 Zacks industries.The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright, bright-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.The industry’s position in the top 50% of the Zacks-ranked industries results from a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in the group’s earnings growth potential.Before we present a few stocks that investors can consider, let us analyze the industry’s recent stock-market performance and valuation picture.Industry Underperforms the S&P 500The Zacks Leisure and Recreation Services industry has underperformed the Zacks S&P 500 composite but outperformed its sector in the past year. Stocks in the industry have collectively gained 25.2% in the past year compared with the broader sector’s rally of 15.8%. The S&P 500 has risen 29.2% in the said time frame.ValuationOn the basis of the forward 12-month EV/EBITDA (Enterprise Value/Earnings before Interest Tax Depreciation and Amortization), which is a commonly used multiple for valuing debt-laden leisure service stocks, the industry trades at 56.37X compared with the S&P 500’s 24.81X and the sector’s 16.07X. In the past five years, the industry has traded as high as 61.56X and as low as 6.46X, with the median being 9.77X.4 Leisure & Recreation Services Stocks to Keep an Eye OnCarnival: The company has been benefiting from sustained demand strength, increased booking volumes at significantly higher prices and the base loading strategy. In third-quarter fiscal 2024, Carnival reported a solid booked position for the remainder of the year, with pricing and occupancy considerably higher than the 2023 reported levels. Also, the company’s focus on marketing campaigns bodes well.Shares of this Zacks Rank #1 (Strong Buy) company have moved up 68.2% in the past year. In fiscal 2025, the company’s sales and earnings are expected to witness growth of 3.5% and 26.8% year over year, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.Royal Caribbean: Based in Miami and incorporated in 1985, RCL is a cruise company. It has been benefiting from strong cruising demand from new and loyal guests, and robust booking trends. Strength in consumer spending onboard and pre-cruise purchases bodes well. Going forward, the company emphasized investing in a modern digital travel platform to streamline the vacation booking process for customers and expand wallet share.This Zacks Rank #2 (Buy) stock has skyrocketed 119% in the past year. The company’s 2024 sales and earnings are expected to witness growth of 18.6% and 71.6%, respectively, from the prior year’s reported levels.Norwegian Cruise: The company has been benefiting from strong demand, high pricing and increased booking volumes, leading to record advance ticket sales. Its focus on fleet expansion efforts and digital initiatives bodes well. The company intends to focus on marketing efforts to drive demand and high-value bookings. Norwegian Cruise’s focus on fleet expansion efforts and partnerships bodes well.Shares of this Zacks Rank #2 company have surged 78.5% in the past year. The company’s 2024 earnings and sales are expected to witness year-over-year growth of 10.2% and 8%, respectively.Cinemark: The company, together with its subsidiaries, engages in the motion picture exhibition business. Cinemark's growth prospects are optimistic, driven by encouraging trends in moviegoing, film volume recovery and strong content appeal. The company believes that it is uniquely positioned to succeed due to its competitive strengths and various strategies for value creation.Shares of this Zacks Rank #2 company have upsurged 125.9% in the past year. In the past 30 days, Cinemark's 2024 earnings estimates have witnessed upward revisions of 37%.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Carnival Corporation (CCL): Free Stock Analysis Report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report Cinemark Holdings Inc (CNK): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks