In today's IBD's Screen of the Day, we look at stocks whose relative strength line is reaching an all-time high. Travel stocks are in the list as investors eye a return to pre-pandemic travel.
Easing geopolitical tensions are also propelling travel stocks, following Russian remarks of a partial troop withdrawal from the border with Ukraine. Here are some of the hottest stocks on the screen.
Hilton Reports Earnings Wednesday, Eyes Buy Point
Hotel chain Hilton Worldwide climbed 4% Tuesday afternoon on easing geopolitical tensions. This brought the stock close to a 159.31 buy point after it formed a cup pattern.
Hilton will report its fourth-quarter results Wednesday morning. Analysts estimate 72 cents EPS with sales at $1.82 billion. If it meets these results, it would result in a full-year EPS of $2.14, an impressive recovery from just 10 cents a year prior.
As travel returns to normal, Hilton expects strong growth in the year to come. It projects EPS to almost double to $4.08 in 2022. Analysts will be keen to see if there are any updates to this strong forward guidance.
Leisure Stock Surges Past Buy Point
SeaWorld Entertainment has surged — it is up over 5% Tuesday afternoon and reached a Relative Strength Rating of 97.
SeaWorld formed a double-bottom pattern and has just surged past the 70.07 buy point, according to MarketSmith. The relative strength line is at new highs, a bullish sign.
Coronavirus-related closures hit the marine theme park hit. That resulted in a dismal $3.99 loss per share in 2020.
Results improved dramatically in 2021, especially in the second and third quarters, which are typically the strongest for SeaWorld. The company will report its fourth-quarter results on Feb. 24. The Street expects EPS at 30 cents on sales of $342 million, according to FactSet.
Analysts will be keen to see the effects of the Covid omicron-related slowdown on revenue, though full effects will not be felt until the first quarter of 2022, with an estimated loss of 24 cents per share. Despite this, analysts expect SeaWorld to grow strongly in the latter half of the year and have an earnings increase over 45% on the year from 2021 levels.
American Express In Buy Range
American Express is in a buy zone from a 189.13 buy point. The company — a financial firm whose business is partly tied to leisure activity — has been on a run since reporting solid year-end results at the end of January.
AmEx reported full-year EPS of $10.02, almost doubling the $5.34 reported in 2020 — a year plagued by Covid restrictions and weak consumer spending.
Sentiment continues to strengthen today as the Russia-Ukraine crisis appears to cool off. And easing of Covid restrictions would bring about increased travel and spending. This could allow for a potential furthering on already record levels of card-member spending last year.
