Bernstein analyst Richard Clarke said on Monday that he is optimistic about online travel stocks amid growing expectations that demand will not slump. Indeed, Clarke expects travel demand to be supported by Asia and high-end customers. Additionally, the limited growth of hotel locations will preserve pricing power and aid demand growth.
Based on these predictions, the firm selected Airbnb (NASDAQ:ABNB) as its top pick in this sector. Bernstein suggested that investors hold onto the stock into 2024 due to rapid growth expectations.
Moreover, the firm also upgraded Bookings Holdings’ (NASDAQ:BKNG) rating to Market Perform from Underperform. Clarke expects the company to continue performing well in the near term thanks to its high margins.
Furthermore, Bernstein upgraded Tripadvisor (NASDAQ:TRIP) to an Outperform rating, signaling increased confidence in the company’s prospects. According to Clarke, the stable, profitable core business is effectively supporting the rapid expansion of Viator. Notably, Viator is anticipated to reach profitability by FY2024.
Meanwhile, he maintained his Market Perform status on Expedia (NASDAQ:EXPE), citing concerns about potential revenue growth challenges and the impact on free cash flow in the event of a market slowdown.
What are the Best Travel Stocks to Buy Right Now?
Shares of Airbnb, Expedia, and Booking Holdings saw marginal upticks in Monday’s trading session. Conversely, Trip Advisor’s stock slightly decreased within the same period. Turning to Wall Street, ABNB stock remains the leader in upside potential here. This Moderate Buy-rated stock offers 16.78% upside against its average price target of $139.50. Meanwhile, EXPE stock is the laggard, as this Moderate Buy-rated stock offers investors only 5.20% upside potential.
