Chicago, IL – May 20, 2025 – Today, Zacks Equity Research discusses Carnival Corp. & plc CCL, Pursuit Attractions and Hospitality, Inc. PRSU and The Marcus Corp. MCS.
Link: https://www.zacks.com/commentary/2474034/3-leisure-recreation-industry-stocks-to-buy-in-a-promising-industry
The Zacks Leisure and Recreation Services industry has been gaining from optimizing business processes, consistent partnerships and digital initiatives. Robust demand for concerts, easing trade tension and strong bookings for cruise operators are supporting the industry. Firms like Carnival Corp. & plc, Pursuit Attractions and Hospitality, Inc. and The Marcus Corp. are likely to benefit from the trends mentioned above.
The Zacks Leisure and Recreation Services industry comprises various recreation providers, such as cruise, entertainment and media owners; golf-related leisure and entertainment venue businesses; and theme park makers, resort operators and event organizers. Some industry players have ski and sports businesses, while some operate health and wellness centers onboard cruise ships and at destination resorts.
Many companies are engaged in hospitality and related businesses. A few industry participants also provide weight management products and services. These companies primarily thrive on overall economic growth, which fuels consumer demand for products. Demand, which is highly dependent on business cycles, is driven by a healthy labor market, rising wages and growing disposable income.
Robust Demand Helps Cruise Operators: The cruise industry is benefiting from strong demand for cruising and accelerating booking volumes. The industry is benefiting from solid bookings related to North American and European sailings. Also, strong pricing (on closer-in-demand) and solid onboard spending bode well for the industry.
Theme Park Operators & Live Entertainment Benefit From Robust Demand: The theme park industry is benefiting from robust demand. Theme park operators have been gaining from improving visitation. Consumer spending at theme parks continues to rise. The theme park sector is experiencing a boost from integrating technology, particularly through augmented and virtual reality. Live entertainment firms have benefited from pent-up live event demand and robust ticket sales.
Trade Tensions Ease: Investor sentiment improved following a trade truce between the United States and China. After weekend negotiations, both nations agreed to pause the imposition of new tariffs for 90 days to allow time for further discussions. This development has sparked optimism that additional trade agreements with other countries may follow. The combination of easing global trade tensions and signs of slowing inflation has helped ease concerns about a potential slowdown in the U.S. economy.
The Zacks Leisure and Recreation Services industry is grouped within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #87, which places it in the top 36% of 245 Zacks industries.
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright, near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry's position in the top 50% of the Zacks-ranked industries results from a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in the group's earnings growth potential.
Before we present a few stocks that investors can consider, let us analyze the industry's recent stock-market performance and valuation picture.
The Zacks Leisure and Recreation Services industry has underperformed the Zacks S&P 500 composite and its sector in the past year. Stocks in the industry have collectively gained 10.7% in the past year compared with the broader sector's rally of 18.4%. The S&P 500 has risen 12% in the said time frame.
On the basis of the forward 12-month EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortization), which is a commonly used multiple for valuing debt-laden leisure service stocks, the industry trades at 60.75X compared with the S&P 500's 24.69X and the sector's 16.38X. In the past five years, the industry has traded as high as 66.92X and as low as 18.33X, the median being 39.58X.
Carnival: The company is benefiting from sustained demand strength, increased booking volumes, higher onboard revenues and cost discipline. With solid performance in every area, the company raised its 2025 guidance, supported by operational efficiency and growth initiatives.
Shares of this Zacks Rank #2 (Buy) company have soared 45.4% in the past year. In fiscal 2025, CCL's sales and earnings are expected to witness year-over-year growth of 4.2% and 30.3%, respectively. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Pursuit: The company delivered solid first-quarter results 2025, supported by multiple positive factors despite the seasonally slower period. The company saw approximately 9% year-over-year growth in both its effective ticket price for attractions and its lodging revenue per available room on a same-store, constant-currency basis, highlighting strong operational performance. A key driver of the company's outlook is a healthy pace in advance bookings, which positions Pursuit well for the upcoming peak summer season.
Shares of this Zacks Rank #2 company have declined 15.4% in the past year. In the past 7 days, PRSU's 2025 earnings estimates have witnessed upward revisions of 11.5%.
Marcus: The company is optimistic about continued momentum with a robust film lineup ahead. Its hotel segment showed resilience, supported by growing group bookings and newly renovated properties. Share repurchases also underscore management's confidence in long-term growth.
This Zacks Rank #2 stock has surged 60.1% in the past year. The company's 2025 sales and earnings are expected to witness growth of 5.2% and 264%, respectively, from the prior year's reported levels.
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