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5 Leisure and Recreation Services Stocks to Buy for the Holiday Season
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The leisure and recreation services industry benefits from macroeconomic tailwinds, particularly the Federal Reserve's interest rate reduction. The 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.
At this stage, we recommend five stocks from the leisure and recreation services space for this holiday season. These are - Carnival Corporation & plc (CCL - Free Report) , Royal Caribbean Cruises Ltd. (RCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) , Planet Fitness Inc. (PLNT - Free Report) and The Marcus Corp. (MCS - Free Report) .
Positive Catalysts
In November, the Federal Reserve reduced interest rates for the second time this year, lowering the benchmark rate by 25 basis points to 4.5-4.75%. This follows a 50-basis-point reduction in September 2024.
According to the Fed, economic activity continues to grow at a steady pace. Although the unemployment rate has moved up slightly, it remains low. Inflation has moderated closer to the Fed's target, though it still sits slightly above the desired levels.
The Zacks-defined Consumer Discretionary - Leisure and Recreation Services Industry is currently in the top 8% of the Zacks Industry Rank. In the past year, the industry has provided 34.6% returns, while its year-to-date return is 24.2%. Since it is ranked in the top half of Zacks Ranked Industries, we expect the consulting services industry to outperform the market over the next three to six months.
Buy 5 Leisure and Recreation Services Stocks
These stocks have strong revenues and earnings growth potential for 2025. Moreover, these stocks have seen positive earnings estimate revisions over the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Carnival Corporation & plc
Zacks Rank #1 Carnival is benefiting from sustained demand strength, increased booking volumes at significantly higher prices and the base loading strategy. During the third-quarter fiscal 2024, CCL reported a solid booked position for the remainder of the year, with pricing and occupancy considerably higher than the 2023 levels.
Also, the focus on marketing campaign efforts bodes well. Going forward, CCL emphasized strategic investments in fleet modernization to drive growth. Owing to strong demand and cost-saving opportunities, CCL raised its full-year 2024 adjusted EBITDA guidance.
Carnival has an expected revenue and earnings growth rate of 3.4% and 24.8%, respectively, for the current year (ending November 2025). The Zacks Consensus Estimate for current-year earnings has improved 6.4% in the last 60 days.
Royal Caribbean Cruises Ltd.
Zacks Rank #2 Royal Caribbean Cruises posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. RCL has been benefiting from strong cruising demand from new and loyal guests and robust booking trends.
Also, strength in consumer spending onboard and pre-cruise purchases bodes well. RCL emphasized investing in a modern digital travel platform to streamline the vacation booking process for customers and expand wallet share. Also, RCL emphasized new innovative ships and onboard experiences to boost its offering and deliver superior yields and margins.
Royal Caribbean Cruises has an expected revenue and earnings growth rate of 9.2% and 22.7%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 0.6% in the last seven days.
Norwegian Cruise Line Holdings Ltd.
Zacks Rank #1 Norwegian Cruise Line reported impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom lines increased on a year-over-year basis. The upside was driven by strong consumer demand and a solid booking environment.
Also, NCLH reported a rise in onboard spending, boosted by shore excursions and improved communication offerings via Starlink high-speed Internet. NCLH intends to focus on strategic marketing efforts to drive demand and high-value bookings. Focus on fleet expansion efforts and strategic partnerships bodes well for NCLH.
Norwegian Cruise Line has an expected revenue and earnings growth rate of 8.2% and 25.4%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 6.2% in the last 30 days.
Planet Fitness Inc.
Zacks Rank #2 Planet Fitness is benefiting from the contributions of new store openings, higher royalty revenues, and an asset-light growth model. PLNT’s strength in the contributions from these factors along with new member acquisitions was reflected in increase in system-wide same-store sales. Also, the favorable pricing of PLNT’s membership cards, new pricing opportunities’ considerations and relaunching of its High School Summer Pass program bodes well.
Planet Fitness has an expected revenue and earnings growth rate of 9.9% and 16.9%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 3.2% in the last 30 days.
The Marcus Corp.
Zacks Rank #1 The Marcus is engaged in the lodging and entertainment industries. MCS operates through two segments: Movie Theatres, and Hotels and Resorts. MCS’ movie theatre division owns or manages screens at locations in several states, as well as a family entertainment center.
Marcus' lodging division owns or manages hotels and resorts in several states, as well as a vacation club. MCS also provides hospitality management services, including check-in, housekeeping, and maintenance for a vacation ownership development.
The Marcus has an expected revenue and earnings growth rate of 6.6% and more than 100%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 14.6% in the last 30 days.
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5 Leisure and Recreation Services Stocks to Buy for the Holiday Season
The leisure and recreation services industry benefits from macroeconomic tailwinds, particularly the Federal Reserve's interest rate reduction. The 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.
At this stage, we recommend five stocks from the leisure and recreation services space for this holiday season. These are - Carnival Corporation & plc (CCL - Free Report) , Royal Caribbean Cruises Ltd. (RCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) , Planet Fitness Inc. (PLNT - Free Report) and The Marcus Corp. (MCS - Free Report) .
Positive Catalysts
In November, the Federal Reserve reduced interest rates for the second time this year, lowering the benchmark rate by 25 basis points to 4.5-4.75%. This follows a 50-basis-point reduction in September 2024.
According to the Fed, economic activity continues to grow at a steady pace. Although the unemployment rate has moved up slightly, it remains low. Inflation has moderated closer to the Fed's target, though it still sits slightly above the desired levels.
The Zacks-defined Consumer Discretionary - Leisure and Recreation Services Industry is currently in the top 8% of the Zacks Industry Rank. In the past year, the industry has provided 34.6% returns, while its year-to-date return is 24.2%. Since it is ranked in the top half of Zacks Ranked Industries, we expect the consulting services industry to outperform the market over the next three to six months.
Buy 5 Leisure and Recreation Services Stocks
These stocks have strong revenues and earnings growth potential for 2025. Moreover, these stocks have seen positive earnings estimate revisions over the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Carnival Corporation & plc
Zacks Rank #1 Carnival is benefiting from sustained demand strength, increased booking volumes at significantly higher prices and the base loading strategy. During the third-quarter fiscal 2024, CCL reported a solid booked position for the remainder of the year, with pricing and occupancy considerably higher than the 2023 levels.
Also, the focus on marketing campaign efforts bodes well. Going forward, CCL emphasized strategic investments in fleet modernization to drive growth. Owing to strong demand and cost-saving opportunities, CCL raised its full-year 2024 adjusted EBITDA guidance.
Carnival has an expected revenue and earnings growth rate of 3.4% and 24.8%, respectively, for the current year (ending November 2025). The Zacks Consensus Estimate for current-year earnings has improved 6.4% in the last 60 days.
Royal Caribbean Cruises Ltd.
Zacks Rank #2 Royal Caribbean Cruises posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. RCL has been benefiting from strong cruising demand from new and loyal guests and robust booking trends.
Also, strength in consumer spending onboard and pre-cruise purchases bodes well. RCL emphasized investing in a modern digital travel platform to streamline the vacation booking process for customers and expand wallet share. Also, RCL emphasized new innovative ships and onboard experiences to boost its offering and deliver superior yields and margins.
Royal Caribbean Cruises has an expected revenue and earnings growth rate of 9.2% and 22.7%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 0.6% in the last seven days.
Norwegian Cruise Line Holdings Ltd.
Zacks Rank #1 Norwegian Cruise Line reported impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom lines increased on a year-over-year basis. The upside was driven by strong consumer demand and a solid booking environment.
Also, NCLH reported a rise in onboard spending, boosted by shore excursions and improved communication offerings via Starlink high-speed Internet. NCLH intends to focus on strategic marketing efforts to drive demand and high-value bookings. Focus on fleet expansion efforts and strategic partnerships bodes well for NCLH.
Norwegian Cruise Line has an expected revenue and earnings growth rate of 8.2% and 25.4%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 6.2% in the last 30 days.
Planet Fitness Inc.
Zacks Rank #2 Planet Fitness is benefiting from the contributions of new store openings, higher royalty revenues, and an asset-light growth model. PLNT’s strength in the contributions from these factors along with new member acquisitions was reflected in increase in system-wide same-store sales. Also, the favorable pricing of PLNT’s membership cards, new pricing opportunities’ considerations and relaunching of its High School Summer Pass program bodes well.
Planet Fitness has an expected revenue and earnings growth rate of 9.9% and 16.9%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 3.2% in the last 30 days.
The Marcus Corp.
Zacks Rank #1 The Marcus is engaged in the lodging and entertainment industries. MCS operates through two segments: Movie Theatres, and Hotels and Resorts. MCS’ movie theatre division owns or manages screens at locations in several states, as well as a family entertainment center.
Marcus' lodging division owns or manages hotels and resorts in several states, as well as a vacation club. MCS also provides hospitality management services, including check-in, housekeeping, and maintenance for a vacation ownership development.
The Marcus has an expected revenue and earnings growth rate of 6.6% and more than 100%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 14.6% in the last 30 days.