These 2 reopening stocks look poised to deliver solid gains as travel makes its return.
Vaccine shots are going in arms and coronavirus lockdowns are finally easing as the U.S. faces the anniversary of the start of our COVID-19 outbreak that has killed more than 520,000 Americans.
As people begin to see a glimmer of a return to normal, reopening stocks are moving higher.
Cruise stocks, hotels, casinos, and airlines are all seeing gains, while the stay-at-home stocks that saw massive rallies amid the pandemic struggle.
But not all reopening trades are created equal and Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, says one casino operator may be investors’ best bet now.
“Lido Advisors has taken a position in their Lido recovery portfolio in Las Vegas Sands (NYSE: LVS),” Sanchez said. “It was an absolute dog in January, they missed earnings because of travel restrictions on the Chinese Lunar New Year, but if you want a way to play China and the travel recovery in the United States, this is an interesting one.”
Las Vegas Sands shares got a boost on Wednesday when the casino operator announced it was selling its Las Vegas properties—including the Venetian, Palazzo, and the Sands Expo Convention Center—for $6.25 billion to Vici Properties (NYSE: VICI) and Apollo Global Management.
While the company is exiting its namesake city, it will use the funds to expand its footprint in Macao and Singapore. And its no wonder why, Las Vegas Sands’ Asia properties accounted for roughly 90% of its revenue last year.
“This company is focused on growth, and we see meaningful opportunities on a variety of fronts,” said LVS Chairman and CEO Robert Goldstein. “Asia remains the backbone of this company and our developments in Macao and Singapore are the center of our attention.”
However, the company isn’t fully ruling out the U.S. market and has expressed interest in building in New York and has considered Texas another potential growth market.
Sanchez added that her firm thinks “that the upside potential from here is really interesting and they’re very attractively priced right now.”
Piper Sandler’s Craig Johnson has another reopening stock in mind.
“Instead of trying to find one individual hotel or one individual company, play it all through TripAdvisor (NASDAQ: TRIP),” Johnson, the firm’s chief market technician, said. “I think there’s going to be a lot of individuals that are going to be looking to travel again.”
Pointing to the stock’s chart, Johnson says the stock has moved higher after a major bottom and he now sees the stock rising to its highs set back in 2018, implying upside of around 24% from Thursday’s close of $51.69.
TripAdvisor shares also got a vote of confidence from Citi analyst Jason Bazinet who upgraded the stock from Neutral to Buy this week. Bazinet also boosted his price target form $29 to $62.
The upgrade came after the company’s recent soft-launch of its TripAdvisor Plus service, which costs $99 and gives subscribers access to deals and special perks from hotels and other vacation services.
“We were initially skeptical about Plus, the firm’s new subscription offering currently in beta,” Bizinet wrote in a note. “After working though the math and potential adoption rates, we are more optimistic.”