Zacks Industry Outlook Highlights Royal Caribbean, Trip.com, Carnival and Six Flags

For Immediate ReleaseChicago, IL – February 6, 2025 – Today, Zacks Equity Research discusses Royal Caribbean Cruises Ltd. RCL, Trip.com Group Ltd. TCOM, Carnival Corp. & plc CCL and Six Flags Entertainment Corp. FUN.Industry: Leisure & RecreationLink: https://www.zacks.com/commentary/2409869/4-must-buy-stocks-in-the-thriving-leisure-recreation-industryThe Zacks Leisure and Recreation Services 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., Trip.com Group Ltd., Carnival Corp. & plc and Six Flags Entertainment Corp. 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 FutureRobust 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.Theme Park Operators & Live Entertainment Benefit From Robust Demand: 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.Uncertain Economy: U.S. consumer confidence declined for the second consecutive month in January as concerns over the labor market and inflation resurfaced. According to data released by the Conference Board on Tuesday, the consumer confidence index dropped to 104.1 from a revised 109.5 in December. In the January meeting, the Federal Reserve opted to hold interest rates steady at 4.25% to 4.5%, signaling a cautious stance on further reductions. This decision reflects lingering inflation concerns and uncertainty surrounding President Donald Trump’s economic policies, particularly on trade and immigration.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 #62, which places it in the top 25% 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, near-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 Outperforms the S&P 500The Zacks Leisure and Recreation Services industry has outperformed the Zacks S&P 500 composite and its sector in the past year. Stocks in the industry have collectively gained 25.3% in the past year compared with the broader sector’s rally of 14%. The S&P 500 has risen 22.5% 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 10.19X compared with the S&P 500’s 13.96X and the sector’s 16.07X. In the past five years, the industry has traded as high as 393.36X and as low as 5.79X, the median being 13.07X.4 Leisure & Recreation Services Stocks to Keep an Eye OnTrip.com: The company’s prospects are benefiting from the growing travel demand for both domestic and cross-border travel. With easing macro conditions across the globe, consumers seem to be optimistic, resulting in heightened travel sentiments. The domestic China market’s travel demand is strong, especially for inland and lesser-known destinations, contributing to the development of local tourism. This backdrop, coupled with the company’s product offerings, is aiding its top-line growth. Moreover, on the international front, global businesses continue to witness strong momentum, resulting in increased air ticket bookings and hotel reservations.Shares of this Zacks Rank #1 (Strong Buy) company have surged 80.5% in the past year. In the past 30 days, TCOM's 2025 earnings estimates have witnessed upward revisions of 0.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.Carnival: The company is benefiting from sustained demand strength, increased booking volumes and improved operational efficiency across its fleet. The addition of ships to the already diversified fleet, gains from existing marketing campaigns and investing in the latest marketing campaigns on the back of global demand trends are additional benefits.Shares of this Zacks Rank #2 (Buy) company have soared 69.6% in the past year. In fiscal 2025, CCL’s sales and earnings are expected to witness year-over-year growth of 4% and 24.7%, respectively.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. The company emphasized investing in a modern digital travel platform to streamline the vacation booking process for its customers and expand wallet share.This Zacks Rank #2 stock has skyrocketed 118.6% in the past year. The company’s 2025 sales and earnings are expected to witness growth of 9.1% and 24.9%, respectively, from the prior year’s reported levels.Six Flags: The company’s performance has been fueled by strong attendance across its combined portfolio, supporting the belief that its consumer base remains healthy and the demand for its products remains robust. The momentum in demand across both legacy Cedar Fair and legacy Six Flags parks has led to a meaningful increase in the sales of season passes and memberships. These positive trends underscore guests' willingness to spend during their visits and highlight the park teams' ability to deliver compelling products and high-quality guest service.Shares of this Zacks Rank #2 company have gained 7.2% in the past year. FUN’s 2025 earnings and sales are expected to witness year-over-year growth of 25.6% and 224.6%, respectively.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.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want 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 Six Flags Entertainment Corporation (FUN): Free Stock Analysis Report Trip.com Group Limited Sponsored ADR (TCOM): 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