Time to Buy These Leisure & Recreation Stocks: ATAT, CCL, NCLH

Industry Overview - The Zacks Leisure and Recreation Services Industry ranks in the top 31% of over 250 Zacks industries, with several stocks achieving a Zacks Rank 1 (Strong Buy) status [1] Atour Lifestyle Holdings - Atour Lifestyle Holdings (ATAT) is the largest upper midscale hotel chain in China, operating 834 hotels across 151 cities [2] - Following China's new economic stimulus and deflationary efforts, ATAT's stock has surged over +50% in the last month and +66% year-to-date [2] - Earnings estimates for fiscal 2024 and FY25 have increased by 10% and 5% respectively in the last 60 days, with ATAT trading at a forward earnings multiple of 22.8X [3] - Annual EPS is expected to rise by 32% this year to $1.22, up from$0.92 in 2023, with FY25 EPS projected to grow another 14% [3] - Atour anticipates high double-digit top line growth, aiming for annual sales nearing $1 billion, and offers a 1.51% annual dividend yield [3] - Since going public in November 2022, ATAT's stock has increased by +120% [3] Cruise Lines - The Federal Reserve's interest rate cuts are expected to boost consumer discretionary spending, benefiting Carnival Corporation (CCL) and Norwegian Cruise Line (NCLH), both rated as strong buys [6] - CCL and NCLH have experienced record bookings for 2024, with expectations of a significant rebound in earnings [6] - EPS estimates for both cruise lines have been trending higher over the last 30 days, and they trade at discounts compared to the industry average of 22.5X forward earnings and the S&P 500's 24.4X [6] Market Outlook - Increased spending on leisure and recreation services is anticipated as global inflation eases, which could positively impact the performance of highly-ranked Zacks stocks [7]