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3 Leisure Stocks Set to Pull Off a Beat This Earnings Season

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The leisure industry is likely to have benefited from robust demand for recreational products and golf business stemming from the pandemic. In fact, golf manufactures and boating suppliers have been gaining significantly amid the coronavirus crisis.

New boat sales have increased sharply amid the outbreak. In fact, boat sales have been going through the roof since April-end last year and some dealers are hard pressed to supply. Matt Gruhn, president of the Marine Retailers Association of America (MRAA), is of the opinion that people have had time to research boats while they’ve been cooped up at home. Per National Marine Manufacturers Association (NMMA) reports, retail unit sales of new powerboats increased by 12% in 2020, compared with the prior year. More than 310,000 new powerboats were sold in 2020. Moreover, boat sales in the United States touched a 13-year high.

The golf industry has been doing exceptionally well during the pandemic. Golf is gaining from increase in participation of young people who were compelled to refrain from sports like football in adherence to social distancing protocols. Per Golf Datatech and its 2020 National Golf Performance Report, 2020 rounds rose by 13.9%, while equipment sales climbed 10.1% in 2020. The 10.1% increase in retail sales broke the previous record gain of 10% in 2005.

However, the cruise industry continues to be impacted by the coronavirus pandemic. Due to the crisis, companies had to cancel sailings. Meanwhile, higher-than-anticipated load factors, timing and investment in revenue-generating activities are adding to their costs. Furthermore, the leisure services industry is weighed down by high cost burden.

How to Make the Right Pick?

Given the wide range of companies in this space, the task is by no means easy. While it is impossible to be sure of the outperformers, our proprietary methodology — a positive Earnings ESP along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.

Our Choices

Here are a few leisure companies that investors can take a look at.

Callaway Golf Company (ELY - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 10. It has an Earnings ESP of +5.13% and a Zacks Rank #1. Further, the Zacks Consensus Estimate for fourth-quarter bottom line is pegged at a loss of 20 cents, compared with a loss of 26 cents in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Callaway Golf Company Price and EPS Surprise

Callaway Golf Company Price and EPS Surprise

Callaway Golf Company price-eps-surprise | Callaway Golf Company Quote

YETI Holdings, Inc. (YETI - Free Report) is slated to report fourth-quarter 2020 results on Feb 11. It has an Earnings ESP of +6.91% and a Zacks Rank #2. Further, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 63 cents, indicating growth of 31.3% from the prior-year quarter.

YETI Holdings, Inc. Price and EPS Surprise

YETI Holdings, Inc. Price and EPS Surprise

YETI Holdings, Inc. price-eps-surprise | YETI Holdings, Inc. Quote

Camping World Holdings, Inc. (CWH - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 25. It has an Earnings ESP of +45.46% and a Zacks Rank #3. Further, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 11 cents per share, against a loss of 35 cents reported in the prior-year quarter.

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