These 7 stocks will benefit from a travel and entertainment boom, Bank of America says

Published Fri, Feb 12 20218:29 AM ESTUpdated Fri, Feb 12 202111:12 AM EST

Travel and entertainment spending should rebound as the world returns to normal following the Covid-19 pandemic, Bank of America Securities said in a note. The Wall Street bank highlighted seven stocks that should benefit from the pent-up demand for experiential spending. The experiences industry — which encompasses restaurants, travel, movies and entertainment — saw spending drop by nearly 30% to about $492 billion in 2020 from the prior year due to the coronavirus outbreak. "Experiences have been dragged down by significant declines in travel and related categories, movies and live entertainment and gambling," Bank of America Securities analyst Shaun Kelley told clients. However, Kelley said the $2.5 trillion industry should start to normalize as the U.S. gets a grip on the pandemic and more people get vaccinated. Hilton Worldwide , Marriott International , Choice Hotels International , Ryman Hospitality Properties , Apple Hospitality REIT , Southwest Airlines and JetBlue Airways are stocks Bank of America sees benefiting from this potential rebound. The bank has buy ratings on all seven names. Hilton Worldwide, Marriott International and Choice Hotels should all benefit from the return to travel and staying in hotel chains. Kelley has a price target of $150 per share on Marriott and a $120 per-share target on Hilton and Choice Hotels. Marriott traded around $127 a share on Friday, while Hilton's share price hovered above $111. Choice Hotels rose slightly to above $108 a share. Bank of America likes entertainment company Ryman Hospitality Properties as consumers start to travel more. The bank has a price target of $75 per share on the stock. Ryman shares traded around $72 on Friday. "We think this multiple is justified by RHP's growth opportunities, relatively attractive valuation and significant group exposure which we expect to perform solidly once a therapeutic/vaccine is available to the general public," said Kelley. Apple Hospitality REIT is another leisure stock favored by Bank of America. Kelley said Apple Hospitality has a solid balance sheet, margins that are higher than those of its peers and better fundamentals in the early stages of the recovery. Bank of America has a $16 per share price target on Apple Hospitality REIT, which traded around $13 on Friday. Southwest Airlines and JetBlue Airways are the two airlines on Bank of America's list. Kelley said Southwest will not only benefit from the return to travel, but it has an industry-leading balance sheet and a strong competitive position. Bank of America has a $53 per share price target on Southwest. The stock hovered above $51 on Friday. Bank of America likes JetBlue based on the potential strength in leisure-oriented markets. The firm has a $16.50 per share price target on the discount airline. JetBlue traded just above Bank of America's price target on Friday. "Upside risks to our price objective are lower fuel prices, better than expected pricing, lower competitive supply, and general economic strength, said Kelley. — With reporting from CNBC's Michael Bloom

Scenes from a Marriott hotel in Midtown. Last month, it put into effect a 48-hour cancellation policy for new bookings within the Marriott and Starwood brand families.

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Travel and entertainment spending should rebound as the world returns to normal following the Covid-19 pandemic, Bank of America Securities said in a note.

The Wall Street bank highlighted seven stocks that should benefit from the pent-up demand for experiential spending.