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4 Leisure Stocks Poised to Beat Earnings Estimates in Q2

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The leisure industry continues to benefit from strong demand for recreational products and golf business. Golf manufactures and boating suppliers have been gaining amid the ongoing coronavirus pandemic. Rise in fitness products sales due to increasing awareness regarding health and fitness among people is favoring the industry. Easing of government-mandated restrictions and widespread deployment of vaccines have been contributing to the upside as well.

New boat sales have increased sharply amid the coronavirus pandemic. In fact, boat sales have been going through the roof since April-end last year and some dealers are hard pressed to supply. Per ResearchAndMarkets report, the boat repairing market is likely to increase from $6.33 billion in 2020 to $6.81 billion in 2021, witnessing a CAGR of 7.6%. The market is expected to reach $8.75 billion in 2025 at a CAGR of 6.5%.

The theme park industry, which has been rattled by the coronavirus pandemic, is slowly getting back on track owing to reopening of parks. Although parks continue to operate with capacity limitations and modified operations due to the pandemic, visitation is improving. Demand for theme parks is strong in California. Consumer spending at theme parks is also improving.

The cruise industry was severely impacted by the coronavirus pandemic in second-quarter 2021. However, cruise companies are slowly getting back on track with phased resumption of services. Meanwhile, the leisure services industry has been hurt 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) has a Zacks Rank #3 and an Earnings ESP of +900.00%. The Zacks Consensus Estimate for second-quarter 2021 bottom line is pegged at a loss of a penny, against an earnings of 6 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

Caesars Entertainment, Inc. (CZR - Free Report) has a Zacks Rank #2 and an Earnings ESP of +265.63%. The Zacks Consensus Estimate for its second-quarter fiscal 2021 bottom line stands at a loss of 32 cents, which suggests an improvement of 74.4% from a loss of $1.25 reported in the prior-year quarter. In the past 30 days, loss estimates of current have narrowed by 6 cents for the quarter to be reported.

Six Flags Entertainment Corporation (SIX - Free Report) has an Earnings ESP of +39.55% and a Zacks Rank #3. The Zacks Consensus Estimate for second-quarter 2021 bottom line is pegged at a loss of 15 cents per share, compared with a loss of $1.62 in the year-ago quarter. In the past 30 days, loss estimates of current have narrowed by12 cents for the second quarter.

AMC Entertainment Holdings, Inc. (AMC - Free Report) has an Earnings ESP of +10.66% and a Zacks Rank #3. The Zacks Consensus Estimate for second-quarter 2021 bottom line stands at a loss of 91 cents per share, compared with a loss of $5.44 reported in the prior-year quarter.