There are a number of stocks investors have been watching closely since the pandemic first made its mark on Wall Street, shutting down industries altogether for most of the year.
A majority of these companies have been tied to the travel and entertainment industry, particularly airlines, cruise lines, hotels and casinos. All have been decimated since positive cases of COVID-19 have surged and Americans have been forced to stay inside, during the traditionally busy summer months and holiday season.
And, as we sit here two months into what’s already been a pretty volatile start to 2021, with serious inflation concerns, investors have every reason to be conflicted about the future of the financial landscape. But despite this uncertain sentiment, something is happening with what Yahoo Finance calls “reopening stocks”, which suggests a more optimistic outlook.
Yesterday, shares of both airlines and cruise lines were on fire, while earning positive upgrades from analysts across Wall Street on the heels of positive data surround COVID-19.
Royal Caribbean (RCL) said pricing for its bookings for the second half of this year is trending higher than 2019, adding that 75% of bookings for 2021 are new reservations. Shares of Royal Caribbean gained 9.5%, while peers Carnival Cruise (CCL) and Norwegian Cruise Lines (NCLH) also rallied more than 5.5%.
Meanwhile, airlines earned an industry-wide upgrade from Deutsche Bank analyst Michael Linenberg helping send American Airlines (AAL) shares up more than 9%, along with United (UAL), Delta (DAL), Southwest (LUV), and JetBlue (JBLU), which all gained more than 3%:
“We are upgrading our investment stance on the sector as COVID cases, hospitalizations, and vaccination rates are all trending in the right direction. We are also encouraged by the industry’s nonstop pursuit of numerous initiatives to mitigate the spread of COVID and increase the confidence of the flying public… Airlines that failed to participate meaningfully in past recoveries were typically ‘broken’ business models, had insufficient liquidity, and/or [were] unable to service their financial obligations. We are of the opinion that none of the publicly-traded airlines in our coverage universe fall into those categories.”