Analysts see potential rifts among travel stocks as the post-pandemic boom gives way to clearer winners and losers. This past year brought a continuation of “revenge” travel trends and a recovery in business trips. Looking ahead to 2024, analysts see a potential divergence between and within sub-sectors of the leisure industry as conditions become more normal after the pandemic’s bust-to-boom cycle. Those expectations come with the caveat that a recession would likely hurt all the corners of travel. “We expect travel and leisure demand to prove relatively resilient overall, but with pockets of varying weakness as consumers become more discerning with their budgets,” said Barclays analyst Brandt Montour. In this environment, CNBC Pro scoured Wall Street research for analysts’ top stock picks across the travel and leisure group heading into 2024. Hotels and gaming Montour, who covers gaming, leisure and lodging stocks, favors areas within travel that offer value propositions to the consumer. When looking at specific companies, he likes to see unique growth catalysts or self-help stories. Among hotel and casino chains, Caesars Entertainment and Hilton Grand Vacations are his top picks. Both have underperformed the broader market this year, rising 13% and 8% respectively, despite boasting buy ratings from the majority of Wall Street analysts, according to LSEG. .SPX HGV,CZR YTD mountain Caesars and Hilton Grand Vacations vs. the S & P 500 this year Caesars’ free cash flow has proven resilient, and it’s an underappreciated deleveraging story at the same time, Montour said. He added that the company’s three main business, Las Vegas, regional and digital, can all grow. The resort-and-casino company’s shares could climb nearly 30% over the next year, according to the consensus analyst price target compiled by LSEG. Meanwhile, Hilton Grand Vacations is a good play given its current valuation and because it has helped itself with the pending Bluegreen acquisition . Montour was initially pessimistic on the deal, but changed tack after seeing that Bluegreen will be bought at a discount. Bluegreen checks many strategic boxes and will help make Hilton Grand Vacations an even bigger player in the timeshare market, he added. The average analyst price target forecasts Hilton Grand stock can rise by more than 16% over the coming year, per LSEG. Morgan Stanley’s Jamie Rollo said the key investor debate in the hotel industry is how much revenue per available room can grow…
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