Barclays supports the restoration of the tourism industry.
On Monday, the company upgraded its Marriott and Hilton ratings to being overweight, citing “improved demand trends” in the US, which should benefit hotel stocks.
Michael Binger, president of Gradient Investments, agrees that the time has come to return to certain travel promotions.
“When you increase the shares of hotels, you really bet that the economy will return to normal, and that people will begin to travel again, and I would agree that everything starts to normalize. I see at our local level restaurants, retail, even motorway traffic, “Binger said on Monday at CNBC’s” Trade Nation. “
While Gradient Investments does not own Hilton or Marriott shares, Binger’s firm is betting on other shares.
“Recently we bought a hotel and resort company called Wyndham Destination. This is a vacation company. They serve Central America, they have about 220 resorts throughout the country and around the world. Most importantly, this is more trips to the resorts. We think the area will be back first, “Binger said.
The gradient set a target price of $ 40 at Wyndham, which implies an increase of 31% after Monday’s close. Shares fell 41% this year.
“The caveat is that if the economy does not recover, the vacations are canceled, consumers remain on the sidelines, this is the risk that they will be here,” Binger said.
Ari Wald, Head of Technical Analysis at OppenheimerStill Staying Away From Travel Space.
The economic and tourism “recovery is not yet on schedule,” Wald said in the same segment.
He said that while stocks such as Marriott have stabilized, he does not see much growth potential in the future.
“We were on the show on June 8, highlighting the Marriott as a tactical sale, as the stock went upside down its 200-day average.” Since then, the action has moved away; it has been trying to find support in an average of 50 days. for 87 dollars. But given this bearish trend, simply put, we see more attractive opportunities for funds in other places, ”said Wald.
Marriott fell 40% this year, but rose 94% from the March low.
Disclosure: Gradient owns Wyndham shares.