Technology

4 Leisure Stocks Set to Deliver a Beat This Earnings Season

The leisure industry is likely to have borne the brunt of the coronavirus pandemic in second-quarter 2020. It is to be noted that the country’s unemployment has increased sharply. This has led to sinking consumer confidence and dwindling household income, which severely impacted spending activities. Consequently, this might get reflected in the leisure industry’s second-quarter performance. In fact, the rising macroeconomic uncertainties and bare minimum revenue prospects compelled the industry participants to withdraw their guidance.

The cruise industry has been driven to a standstill by the coronavirus-induced crisis. Major cruise operators like Royal Caribbean Cruises Ltd. RCL, Norwegian Cruise Line Holdings Ltd. NCLH and Carnival Corporation & Plc CCL have lost more than half of the market cap so far this year.

Furthermore, the leisure services industry is weighed down by high cost burden. The industry players generally work through multiple business models. For instance, many event organizers have resort facilities and earn through both the categories. The complex business structure results in huge costs. In order to mitigate the same, most of the industry players have been resorting to pay cuts and furloughing employees. The industry participants are also suspending share repurchase programs and dividend payouts in an effort to improve liquidity. Moreover, supply chain disruptions due the pandemic are likely to continue hurting the industry in the near term.

How to Make the Right Pick?

Given the wide range of companies in this space, the task is by no means easy. While it is impossible to be sure of the outperformers, our proprietary methodology — a positive Earnings ESP along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.

Our Choices

Here are a few leisure companies that investors can take a look at.

Callaway Golf Company ELY is scheduled to report second-quarter 2020 results on Aug 13. It has an Earnings ESP of +222.5% and a Zacks Rank #3. Further, the Zacks Consensus Estimate for second-quarter bottom line is pegged at a loss of 6 cents, suggesting a decline of 116.2% from the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Callaway Golf Company Price and EPS Surprise

Callaway Golf Company Price and EPS Surprise

Callaway Golf Company price-eps-surprise | Callaway Golf Company Quote

Acushnet Holdings Corp. GOLF is slated to report second-quarter 2020 results on Aug 5. It has an Earnings ESP of +180.01% and a Zacks Rank #3. Further, the Zacks Consensus Estimate for second-quarter earnings is pegged at of 19 cents, indicating a decline of 62.8% from the prior-year quarter.

Acushnet Holdings Corp. Price and EPS Surprise

Acushnet Holdings Corp. Price and EPS Surprise

Acushnet Holdings Corp. price-eps-surprise | Acushnet Holdings Corp. Quote

Vista Outdoor Inc. VSTO is scheduled to report first-quarter fiscal 2021 results on Aug 6. It has an Earnings ESP of +1,300.12% and a Zacks Rank #2. Further, the Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at a break-even, compared with a loss of 8 cents reported in the prior-year quarter.

Vista Outdoor Inc. Price and EPS Surprise

Vista Outdoor Inc. Price and EPS Surprise

Vista Outdoor Inc. price-eps-surprise | Vista Outdoor Inc. Quote

SeaWorld Entertainment, Inc. SEAS is slated to report second-quarter 2020 results on Aug 10. It has an Earnings ESP of +3.7% and a Zacks Rank #3. Further, the Zacks Consensus Estimate for second-quarter bottom line is pegged at a loss of 97 cents, suggesting a decline of 251.6% from the prior-year quarter.

SeaWorld Entertainment, Inc. Price and EPS Surprise

SeaWorld Entertainment, Inc. Price and EPS Surprise

SeaWorld Entertainment, Inc. price-eps-surprise | SeaWorld Entertainment, Inc. Quote

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Carnival Corporation (CCL): Free Stock Analysis Report
 
Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report
 
Acushnet Holdings Corp. (GOLF): Free Stock Analysis Report
 
Vista Outdoor Inc. (VSTO): Free Stock Analysis Report
 
SeaWorld Entertainment, Inc. (SEAS): Free Stock Analysis Report
 
Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report
 
Callaway Golf Company (ELY): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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