A higher number of Americans are gearing up for a busy summer travel season. Be it by road or air, Americans this time are encouraged to travel thanks to a booming economy and growing consumer confidence.
This is especially true as the frenzy for trips during the Memorial Day Weekend is far more than the past decade despite the highest gasoline prices in four years. Orlando, FL is expected to be the top destination, followed by Seattle, WA and Honolulu, HI.
According to travel service provider American Automobile Association (AAA), Memorial Day weekend travel is expected to rise for the fourth straight year. More than 41.5 million Americans will travel 50 miles (80 km) over the Memorial Day weekend (May 24-28), up nearly 5% from the last year and the most in more than a dozen years. Of them, 36.6 million will go on a road trip, 3.1 million will fly, and 1.8 million will travel by train and other modes (including buses and cruises).
Though road trip is expected to rise 4.7% over last year, motorists are expected to pay the highest gas price since 2014. Gas averaged $2.72 per gallon in April, up 33 cents from last year. However, travelers’ wallets will find some relief when paying for airfare, car rentals, and most mid-range hotels.
This is because airfares are 7% lower than the last Memorial Day for an average $168 round-trip on the top 40 domestic routes while the average daily cost of a car rental is 11% cheaper and the lowest in the past four years, per AAA’s Leisure Travel Index. Meanwhile, AAA Three Diamond hotels are 14% cheaper than last year at an average rate of $186 per night.
Huge travel demand should boost revenues and profitability for transporters, including airlines and railroads, thereby leading to higher share prices. Investors shouldn’t miss this opportunity and could tap this trend through any of the following stocks that stand to profit big time from the upbeat Memorial Day weekend travel trend.
Echo Global Logistics Inc. (ECHO - Free Report)
This Illinois-based Echo Global Logistics is a leading provider of technology enabled transportation and supply chain management services, delivered on a proprietary technology platform, serving the transportation and logistics needs of its clients. The stock saw solid earnings estimate revision of 15 cents for this year over the last 30 days with an expected growth of 62.79%. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SkyWest Inc. (SKYW - Free Report)
This Utah-based company operates one of the larger regional airlines in the United States. It saw rising earnings estimate of 12 cents for this year over the past 90 days with an expected growth of 16.3%. The stock has a Zacks Rank #1.
Royal Caribbean Cruises Ltd. (RCL - Free Report)
This Florida-based cruise company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises brands around the world. It has seen impressive earnings estimate revision of 14 cents for this year over the past month and has an estimated earnings growth rate of 17.66%. RCL carries a Zacks Rank #3 (Hold).
CSX Corporation (CSX - Free Report)
This Florida-based premier transportation company provides rail, intermodal, and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural and consumer products. The stock has seen solid earnings estimate revision of 14 cents for this year over the past month and has an estimated earnings growth rate of 40.87%. It has a Zacks Rank #3.
Norfolk Southern Corporation (NSC - Free Report)
This Virginia-based company is engaged in the rail transportation of raw materials, intermediate products, and finished goods. The stock has seen positive earnings estimate revision of 17 cents for this year over the last 30 days and has an expected growth of 29.80%. It carries a Zacks Rank #3.
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