Goldman, UBS and Cowen pick travel stocks set to take off in 2022

Published Mon, Dec 20 20211:29 AM EST

The travel industry has taken another pummeling with the onset of the omicron variant. But that isn't stopping analysts at global investment banks like Goldman Sachs and UBS from picking embattled travel stocks they expect to soar in 2022. Even as countries across the world moved to shut down borders and reimpose travel restrictions in a bid to fight the latest wave of Covid-19, the investment houses identified a broad set of depreciated hotel, airline and casino businesses with plenty of room to grow. "Our thesis is simple," investment banking advisory firm Evercore wrote in a December research note. "This pandemic will eventually end ... behavior will normalize." Hotels Wall Street banking giant Goldman Sachs said it is bullish on Whitbread , multinational British hotel and restaurant company responsible for brands including the U.K.'s largest budget hotel chain, the Premier Inn. Though the U.K. faces another winter of rising Covid cases, Goldman said it remained committed to its October "buy" call on the stock, describing at as "well-positioned for a recovery." The bank also cited its dominance over smaller, boutique operators. Bernstein, meanwhile, said luxury hotel chain Hyatt looks poised to outperform in 2022, calling it the "fastest growing hotel group at an unjustified discount." It predicted the stock will rise more than 25% from current levels to hit $105 per share. Airlines In airlines, investment bank Cowen said United Airlines is among the "best positioned for a recovery," with the domestic business already reaching pre-pandemic levels. "2022 is likely to be another crazy year," the bank said in a note. "[But] we believe consumers will eventually react with some ennui and go about their lives as normally as possible." Investment advisory firm Evercore ISI went further, and stuck to its thesis that travel behavior will soon normalize. It highlighted opportunity in various airlines including as Alaska , Allegiant , Copa , Volaris , Delta and Ryanair . "Given this unchanged thesis, while also recognizing there will likely be short-term impacts (more Jan-Feb), we're viewing this latest dose of panic opportunistically, and from a longer-term perspective." Travel operators Elsewhere, UBS dubbed online travel agency Booking Holdings its "favourite name in travel," and gave it a "buy" call in December. The bank said in a note that the company looks set to exceed 2019 performance by the end of 2022, based on increased direct business and scaling of its payments services. It has a price target of $2,838 for the stock over the next 12 months — around 30% higher than current trading levels. Casinos Casinos stocks also look poised for a boost in the longer term, according to SpringOwl Asset Management. The investment firm said it is most bullish on gaming companies in Macao, which have been hit hard by travel restrictions, particularly those for visitors from mainland China. Recent regulatory crackdowns by Chinese authorities have also hurt some of those gaming stocks. SpringOwl's CEO Jason Ader said Las Vegas Sands , which owns and operates resorts and casinos across the U.S., Macao and Singapore, is "top of my list," noting its shares are about 50% lower than January 2020 levels.

A passenger plane takes off from Frankfurt Airport. The aviation industry is particularly hard hit by the effects of the global Corona pandemic.

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