In this article, we will discuss the 10 Worst Cruise Stocks to Buy Now According to Short Sellers.
The cruise industry accelerated after taking a significant hit during the COVID-19 pandemic. As per the Cruise Lines International Association (CLIA), ~35.7 million passengers are anticipated to set sail in 2024. This translates to 6% growth as compared to 2019. JP Morgan Research highlighted that major cruise lines enjoyed a successful 2024 wave season between January and March when operators provided the best deals. CLIA highlighted that, in 2023, the passenger volume touched a record 31.7 million, exhibiting a rise of 7% over 2019 levels.
Wall Street experts believe that travel exchange-traded funds (ETFs) are well-placed to soar on the back of a resurgence in consumer demand for travel-related activities, supported by post-pandemic recovery and changing consumer behaviors. Amidst some short-term challenges, the long-term outlook for the travel sector is positive as a result of demographic shifts and an increased preference for experiential spending.
Positive Demographic Shifts Should Be a Primary Growth Enabler
Earlier, Baby Boomers used to make up the core consumer base for the broader cruise industry. Today, however, an increased number of younger travelers continue to come on board. As per CLIA, ~73% of Millennials and Gen X travelers mentioned that they would consider a cruise vacation. Also, a renowned cruise company has recently mentioned that half of its cruise customers are Millennials or younger. This is because of rising affluence. Moreover, according to the bank’s research, the spending capacity of Millennial customers has seen an increase of ~49% since 2019. Today, the average net worth of an individual aged 40 or under sits at ~$259K.
The cruises continue to attract more first-time passengers. The cruise companies are seeing “new-to-cruise” in their 2025 bookings, with this customer category rising by more than 30% versus a year ago.
The bank believes that cruise operators are improving and modernizing their offerings to make them appealing and highlighted that key operators continue to invest in new hardware, notably mega-ships and private destinations. This has been driving more eyeballs to the broader cruise and tourism industry, accelerating new-to-cruise acquisition. CLIA recently highlighted that the cruise industry has been deploying billions in new ships and engines which give flexibility to use low to zero-GHG fuels with little to no engine modification.
Cruises Over Land-based Activities
According to a survey by the bank’s research division held in April, only ~29% of respondents have excess savings. Notably, ~45% of the respondents are expected to spend less in discretionary categories over the upcoming 12 months. This implies an increased cautious behavior even in the environment of moderating inflation.
This scenario is placing cruise voyages, that are cheaper than land-based vacations, in a strong position. Consumers are focused on value within discretionary categories. The value spread between cruises and land-based alternatives stood at 25%-30% today as compared to 10%-15% pre-pandemic. Despite higher inflation, cruise lines continue to focus on improved experiences, without compromising quality or service. This should further enhance their value.
Despite a tough consumer spending environment, both ticket and onboard prices increased over the past few months. This means that the demand backdrop is strong for the overall cruise industry. The bank’s research shows that more than 85% of tickets have been booked for 2024, with a focus now turning to 2025 and bookings already exceeding historical levels. Moreover, the industry should grow revenues by high-single digits over the upcoming 5 years, tapping ~3.8% of the global vacation market by 2028.
Our methodology
To list the 10 Worst Cruise Stocks to Buy Now According to Short Sellers, we used a Finviz screener to filter out stocks catering to the cruise business. Next, we narrowed our list of stocks by selecting the ones having high short interest. Finally, the stocks were ranked in ascending order of their short interest.
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10 Worst Cruise Stocks to Buy Now According to Short Sellers
10) Viking Holdings Ltd (NYSE:VIK)
Short % of Float (As of 15 August): 2.13%
Number of Hedge Fund Holders: 41
Viking Holdings Ltd (NYSE:VIK) operates as a holding company. The company, with the help of its subsidiaries, specializes in offering offshore recreational travel services by cruise vessels.
Short sellers continue to be bearish about Viking Holdings Ltd (NYSE:VIK) after its 2Q 2024 results. The company’s net income saw a fall to $155.8 million, or 37 cents a share, from $189.93 million, or 46 cents a share, in the same quarter of the previous year. FactSet estimated earnings of 67 cents a share. Viking Holdings Ltd (NYSE:VIK)’s revenue increased by 9% to $1.59 billion from $1.45 billion in the year-ago quarter, marginally missing the analyst estimates of ~$1.6 billion. Also, short sellers opine that the company’s short-term obligations continue to exceed its liquid assets, which might impact its balance sheet health moving forward.
On the other hand, Wall Street analysts are quite optimistic about the growth prospects of Viking Holdings Ltd (NYSE:VIK). They opine that the company’s unique position in the cruise industry, considering its emphasis on a pure-play luxury profile, should continue to act as a growth enabler. This might contribute to its robust pricing momentum. Wall Street believes that the company should achieve above-industry revenue and EBITDA growth in the upcoming years. This growth is expected to stem from its significant capacity growth and yield growth which surpasses industry averages.
Viking Holdings Ltd (NYSE:VIK)’s healthy brand recognition and advantage of long booking lead-times should also aid in achieving this outlook.
Analysts at Stifel Nicolaus upped their target price on the shares of Viking Holdings Ltd (NYSE:VIK) from $37.00 to $39.00, giving the a “Buy” rating on 23rd August. As of 2Q 2024, 41 hedge funds, holding a combined investment of $936.2 million, are bullish on the stock, as per Insider Monkey’s database.
9) Travel + Leisure Co. (NYSE:TNL)
Short % of Float (As of 15 August): 4.42%
Number of Hedge Fund Holders: 37
Travel + Leisure Co. (NYSE:TNL) focuses on offering vacation ownership, managed rental, and exchange services, and owns vacation resorts and exchange properties. The company’s comprehensive cruise coverage allows users to get the newest ships, the best deals, and the most exciting itineraries on the high seas.
The company’s Travel and Membership revenue saw a fall of 1% to $177 million in 2Q 2024 as compared to the same period in the previous year. This was mainly because of a 4% decline in transactions. Moreover, Travel + Leisure Co. (NYSE:TNL) expects that loan loss provisions would be ~100 basis points higher than the expectations. Also, short sellers believe that higher total expenses might weigh over the company’s margins and profitability scenario over the long term. In 2Q 2024, Travel + Leisure Co. (NYSE:TNL)’s total expenses were $796 million, up from $766 million in 2Q 2023.
On the other hand, Wall Street analysts believe that Travel + Leisure Co. (NYSE:TNL) should see strong growth in its vacation ownership business. The company continues to focus on expanding in the Asia-Pacific market and plans to offset increased loan loss provisions with the help of improved core timeshare business performance.
Moreover, the company is expected to benefit from the recent acquisition of the vacation ownership business of Accor. Travel + Leisure Co. (NYSE:TNL) believes that the acquisition will be immediately accretive to its earnings. Also, the acquisition has increased the international portfolio of the company.
Analysts at JPMorgan Chase & Co. initiated coverage on the shares of Travel + Leisure Co. (NYSE:TNL) and increased their price objective from $53.00 to $63.00. They gave an “Overweight” rating on 19th July. As of the end of 2Q 2024, 37 hedge funds held stakes in Travel + Leisure Co. (NYSE:TNL), up from 34 in the preceding quarter.
8) Expedia Group, Inc. (NASDAQ:EXPE)
Short % of Float (As of 15 August): 6.52%
Number of Hedge Fund Holders: 56
Expedia Group, Inc. (NASDAQ:EXPE) offers online travel services for leisure and small business travelers. The company, through its subsidiary, also provides a variety of services, such as cruise vacations, all-inclusive resorts, coach and rail tours, vacation packages, and other related services.
Short sellers believe that the near-term growth trajectory for the company remains uncertain as Expedia Group, Inc. (NASDAQ:EXPE) struggles to improve growth and raise traffic at two of the core brands (i.e., Vrbo and Hotels.com). In early May 2024, Vrbo saw slower rebound than its expectations after a restructuring targeted at enabling customers to book throughout brands under a single platform. The company’s Vrbo brand might continue to see subdued growth as a result of shifts in travel patterns and legacy market share issues.
As per short sellers, Expedia Group, Inc. (NASDAQ:EXPE) continues to see moderating travel growth, with cash-strapped consumers becoming cost-conscious. They are now focusing on “value play” vacations.
On the other hand, Wall Street analysts believe that Expedia Group, Inc. (NASDAQ:EXPE)’s migration to a unified platform between 2020-23, which shares data, supply, and loyalty (OneKey) throughout its brands, should continue to support its network advantage. The company’s investments in loyalty, user experience, and alternative accommodations which were sourced as a result of cost-cutting initiatives should continue to drive growth over the long term.
Wall Street appears to be more optimistic about the company’s B2B segment. This business has seen consistent growth over the previous 5 years and has a distinct nature from its consumer business, driven by loyalty use cases, international markets, and corporate travel. Given the strong hotel supply, distribution of products, and technology, Expedia Group, Inc. (NASDAQ:EXPE) focuses on capturing more of the $1.2 trillion addressable market. The company plans to make investments in supply and technology, which should help strengthen the market position.
Analysts at Susquehanna upped their target price on the company’s shares from $125.00 to $145.00, giving it a “Neutral” rating on 12th August. As per Insider Monkey’s 2Q 2024 data, 56 hedge funds reported owning stakes in the shares of Expedia Group, Inc. (NASDAQ:EXPE).
Artisan Partners, an investment management company, released its second quarter 2024 investor letter. Here is what the fund said:
“Expedia Group, Inc. (NASDAQ:EXPE) shares declined 18% during the quarter after reducing its full-year outlook. It lowered its revenue growth forecast to mid- to high-single digits for 2024 and said margins will stay flat. On the surface, a business growing in the high-single digits while maintaining profitability isn’t bad. The issue is the company just completed a major restructuring that was supposed to result in accelerated revenue growth and significant margin expansion. Neither is happening. The company continues to underperform the industry and its peers. Importantly, management will not share with us the important metrics and disclosures that might give us the ability to understand why. It continues to just tell us that improvement is coming. That is not enough for us, and we have lost confidence that the changes will have the intended impact on the company’s financial performance. As a result, we decided to exit the investment at a modest profit.”
7) Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND)
Short % of Float (As of 15 August): 6.98%
Number of Hedge Fund Holders: 16
Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) offers expedition cruising and adventure travel services.
As of 15th August 2024, the company’s short % of float stood at ~6.98% as short sellers believe that geopolitical headwinds have negatively impacted travel itineraries. The company’s margins remain pressured despite elevated activity. This was mainly because of lower occupancy as compared to the pre-Covid levels. Also, cost inflation led to higher expenses which have impacted its margins. On a TTM basis, its operating margin was -6.01%.
In its 2Q 2024 results, Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) highlighted that higher general and administrative costs limited the gains in Lindblad segment’s Adjusted EBITDA. These costs were led by higher personnel costs and increased royalties associated with the expanded National Geographic agreement. Considering the geopolitical issues, there can be pressures on its occupancy levels. Also, increased debt might weigh on the company’s future. As of 2Q 2024 end, its Long-term debt (less current portion) stood at $623.5 million, an increase from $621.7 million (as on December 31, 2023).
However, Wall Street experts believe that the recently announced transactions are expected to drive future growth. The company announced the acquisition of Wineland-Thompson Adventures, which expands Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND)’s land experience segment with Tanzania safari specialist Thomson Safaris, and Gibb’s Farm lodge in East Africa. Market experts believe that the main competitive advantage is its ability to provide premium experiences, as the company specializes in smaller and more expensive adventure cruises. As a result, Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) has built a strong loyalty base of wealthy customers.
The company expanded its partnership with National Geographic in November 2023. It is now the only partner for National Geographic cruises until 2040. It will be with The Walt Disney Company, which is an affiliate of National Geographic, providing expansion opportunities.
B. Riley upped their price target on the shares of Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) from $15.00 to $16.00, giving a “Buy” rating on 23rd August. As per Insider Monkey’s 2Q 2024, 16 hedge funds were long Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND), up from 15 in the preceding quarter.
Ariel Investments, an investment management company, released first-quarter 2024 investor letter. Here is what the fund said:
“In contrast, shares of luxury adventure travel services company, Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) traded sharply lower in the quarter on an earnings miss and cautious full year 2024 outlook, as geopolitical headwinds negatively impact travel itineraries. Importantly, LIND continues to deliver positive performance within its land-based segment, while management remains disciplined in not sacrificing long-term pricing for sea-based voyages to stimulate near-term demand. Looking ahead, we believe LIND’s stable land-based segment will continue to anchor the company’s profitability. We also expect the enhancement of its strategic relationship with Disney/National Geographic to provide a meaningful tailwind for multiple expansion as the company extends its market share in the expedition tourism niche.”
6) Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Short % of Float (As of 15 August): 8.09%
Number of Hedge Fund Holders: 31
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) operates a fleet of passenger cruise ships. It offers an array of cruise itineraries and theme cruises and markets its services via various distribution channels.
Short sellers believe that Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) continues to struggle with low margins, increased costs, and elevated weighted cost of capital in comparison to returns on invested capital. In 2Q 2024, the company’s total cruise operating expense came in at $1.45 billion as compared to $1.38 billion in 2Q 2023. The short sellers believe that margins for the company would be negatively impacted in 2H 2024 as costs continue to increase at a faster pace than total revenue. Also, the Red Sea sailings cancellation has impacted luxury brand performance, which has weighed upon 4Q 2024 expectations. Short sellers believe that increased oil prices and unfavorable foreign exchange might elevate costs in the remaining half of 2024.
However, Wall Street analysts believe that the strong demand for European, Caribbean, and Alaskan sailings should help it offset the short-term challenges. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)’s optimal book position saw an improvement as a result of better analytics and revenue management tools. Market experts opine that attractive itineraries, together with tactical revenue management, and data-driven marketing should continue to fuel sales growth.
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) continues to focus on right-sizing its cost base and improving margins to strengthen the foundation for profitable growth. Its young average fleet and solid liquidity position should continue to provide competitive advantages.
The Goldman Sachs Group upped their target price on the shares of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) from $19.00 to $21.00, giving it a “Neutral” rating on 28th May. As per Insider Monkey’s 2Q 2024 database, 31 hedge funds reported holding stakes in the company.
Ariel Investments, an investment management company, released its 3Q 2023 investor letter and mentioned Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH). Here is what the fund said:
“Lastly, Cruise ship operator, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) traded lower in the quarter. The stocks strong price appreciation ̶up 34.64% year-to-date ̶ drove profit taking following an underwhelming outlook relative to Royal Caribbean Group’s upward guidance revision. Notably, NCLH continues to deliver record cumulative bookings as well as increased occupancy capacity at higher prices. The company remains focused on right sizing its cost base and improving margins to strengthen its foundation for sustainable and profitable growth. Meanwhile, the company executed on its leadership succession plan, with 15-year veteran, Harry J. Sommer’s recent appointment to CEO. With an experienced management team at its helm, a young average fleet and solid liquidity position, we remain enthusiastic about the name.”
5) Mondee Holdings, Inc. (NASDAQ:MOND)
Short % of Float (As of 15 August): 8.35%
Number of Hedge Fund Holders: 2
Mondee Holdings, Inc. (NASDAQ:MOND) is a travel technology company. It has announced the launch of Mondee Travel Marketplace featuring Abhi, its AI-powered travel assistant platform focusing on the cruise booking process.
The company’s stock has seen a decline of over ~70% over the past year, and short sellers believe that this decline was mainly because of broader economic pressures and sector-specific headwinds. Mondee Holdings, Inc. (NASDAQ:MOND) continues to face working capital constraints and a lower demand, which might continue into 3Q 2024. As a result, the company reduced its forecast for FY 2024. Short sellers believe that the challenging period, mainly because of softer demand and financial constraints, might continue in the remaining half of 2024.
However, Wall Street analysts believe that its strategic refinancing of term loans and preferred equity hints at the strong position for future market share penetration and stable revenue growth. Mondee Holdings, Inc. (NASDAQ:MOND) continues to address its capital constraints as it has extended its 2028 obligations and is focused on increased take rate offerings, like travel packages. This strategy should help the company improve profit margins in the upcoming quarters. The new capital structure is expected to fuel the company’s expansion, improve profitability, and solidify its AI leadership in travel.
Mondee Holdings, Inc. (NASDAQ:MOND)’s much-anticipated refinancing should offer financial flexibility and additional working capital. Therefore, the company might resume and accelerate its growth trajectory.
As per Insider Monkey’s 2Q 2024 database, Mondee Holdings, Inc. (NASDAQ:MOND) was included in the portfolios of 2 hedge funds, up from 1 in the preceding quarter.
4) Royal Caribbean Cruises Ltd. (NYSE:RCL)
Short % of Float (As of 15 August): 8.78%
Number of Hedge Fund Holders: 48
Royal Caribbean Cruises Ltd. (NYSE:RCL) operates as a global cruise company. It operates through brands that mainly serve the contemporary, premium, and deluxe segments of the cruise vacation industry.
Short sellers believe that the company’s valuations have outpaced its fundamentals, as Royal Caribbean Cruises Ltd. (NYSE:RCL)’s stock trades at ~11.99x its forward earnings, while the sectoral average remains at ~7.75x. Another issue that might impact the company’s margins in 2H 2024 is its debt burden and the resulting interest expenses. As of the end of 2Q 2024, its long-term debt sat at over ~19 billion. Apart from this, it has long-term operating lease liabilities and other long-term liabilities of $591 million and $522 million, respectively. For FY 2024, Royal Caribbean Cruises Ltd. (NYSE:RCL) expects its NCC (Net Cruise Costs), excluding Fuel, per APCD to increase approximately 6.0% in constant currency and as-reported.
Wall Street analysts believe that Royal Caribbean Cruises Ltd. (NYSE:RCL)’s stock is well-placed to see strong growth in 2H 2024 as optimized occupancy and productivity initiatives should keep a check on the company’s costs over the long term. Also, consumer interest in travel maintained momentum for Royal Caribbean Cruises Ltd. (NYSE:RCL) in 2024, continuing the healthy demand and strong pricing trends in the business.
The redeployment of the fleet was wrapped up in mid-2022, with occupancy returning to historical levels. These factors led to the normalization of profits and cash flow. Royal Caribbean Cruises Ltd. (NYSE:RCL) saw record pricing in 2023 (13% above its 2019 level), with further growth anticipated moving forward, given strong booking patterns and price levels as a result of a healthy consumer appetite.
Analysts at UBS Group increased their target price on the shares of Royal Caribbean Cruises Ltd. (NYSE:RCL) from $168.00 to $183.00, giving it a “Buy” rating on 31st July. Notably, 48 hedge funds held stakes in the company.
Ariel Investments, an investment management company, released its second-quarter 2024 investor letter. Here is what the fund said:
“Global cruise vacation company, Royal Caribbean Cruises Ltd. (NYSE:RCL), advanced on another quarterly earnings beat and subsequent raise in full-year guidance. Stronger than anticipated consumer demand, healthy onboard spend, robust pricing and solid cost containment lifted recent results. Additionally, RCL is benefitting from several new megaships, more island destinations and re-entry into the China market. The resiliency of the core cruise consumer, in combination with management’s superior operational expertise and revised earnings outlook, lays the foundation for RCL to exceed its three-year strategic imperative, the Trifecta Program, a year earlier than expected.”
3) Despegar.com, Corp. (NYSE:DESP)
Short % of Float (As of 15 August): 8.83%
Number of Hedge Fund Holders: 24
Despegar.com, Corp. (NYSE:DESP) is an online travel company in Latin America. Its product offering includes airline tickets, packages, and other travel-related products. It operates via 2 segments: Air, which consists of the sale of airline tickets, and Packages, Hotels, and Other Travel Products, which consist of travel packages, cruise tickets, and related products.
Short sellers believe that the company faces intense competition from local and global players, which is expected to limit its competitive advantages. Also, increased external and macroeconomic risks might hinder the company’s growth prospects. Short sellers opine that foreign exchange pressures might continue to impact its average selling prices, which can also weigh over its revenues. Moreover, in 1Q 2024, its gross bookings in the rest of Latin America saw a fall of 10% because of FX pressures.
If the currencies like Mexican Peso and the Brazilian Real continue to depreciate, it might make traveling abroad expensive for people of those countries. Also, Argentina (Despegar.com, Corp. (NYSE:DESP)’s third largest market) is in a recessionary environment, which might impact its revenues moving forward.
However, Wall Street analysts believe that the recent divestment of Destination Management Company (DMC), BRExperience, should help Despegar.com, Corp. (NYSE:DESP). Apart from improvement in operational efficiency and maximizing return on capital, this divestiture allows the company to better concentrate resources on its core business and further strengthen the organic growth profile. Moreover, its strategic focus on high-margin package sales and non-air revenues should help the company sail through a challenging environment.
Despegar.com, Corp. (NYSE:DESP) is expected to see expansion in its gross margin, mainly because of cost reductions and Al utilization. The analysts believe that 2H 2024 might generate stronger cash flow, with 4Q being the significant contributor.
Analysts at B. Riley upped their target price on the shares of Despegar.com, Corp. (NYSE:DESP) from $16.00 to $19.00. They gave a “Buy” rating on 17th May 2024. The company was in the portfolios of 24 hedge funds at the end of 2Q 2024, up from 20 in the preceding quarter.
2) Carnival Corporation & plc (NYSE:CCL)
Short % of Float (As of 15 August): 9.46%
Number of Hedge Fund Holders: 53
Carnival Corporation & plc (NYSE:CCL) owns and operates cruise ships providing cruises to all major vacation destinations such as North America, United Kingdom, Germany, Southern Europe, South America, and Asia Pacific.
The short sellers believe that Carnival Corporation & plc (NYSE:CCL)’s higher valuations continue to pose a critical risk. The stock currently trades at ~10.02x its forward earnings, which is higher as compared to the sectoral average of ~7.75x. Moreover, the bears believe that if the interest rate cuts don’t happen as anticipated in 2024, it will be a tough environment for this travel stock, which has high debt levels. Carnival Corporation & plc (NYSE:CCL) has over $27 billion in long-term debt. Therefore, higher interest expenses can weigh over the company’s bottom line in the upcoming quarters of 2024.
However, Wall Street analysts opine that Carnival Corporation & plc (NYSE:CCL) is well-placed for a revival. They believe that demand for cruises is expected to remain strong, with the company’s key performance indicators demonstrating that it should be able to capitalize on this untapped demand.
The repositioning and deployment of cruises to faster-growing and underrepresented regions such as Asia-Pacific continue to provide balance in high-capacity regions such as the Caribbean and Mediterranean before COVID-19. This factor can again be utilized to help optimize forward pricing. Considering the European demand and occupancy profile which continues to converge on normalized levels, Carnival Corporation & plc (NYSE:CCL) should see improved economic performance. Moreover, it is expected to benefit from a strong market presence. Leveraging this competitive advantage should allow the company to position its strategic sales and differentiation in the industry.
Analysts at Bank of America upped their target price on shares of Carnival Corporation & plc (NYSE:CCL) from $23.00 to $24.00, giving it a “Buy” rating on 27th June. As per Insider Monkey’s database, 53 hedge funds held stakes in the company.
1) World Kinect Corporation (NYSE:WKC)
Short % of Float (As of 15 August): 14.49%
Number of Hedge Fund Holders: 16
World Kinect Corporation (NYSE:WKC) is an energy management company, which operates through 3 segments- Aviation, Land, and Marine. The company’s Marine segment provides fuel, lubricants, and services to marine fleets, cruise lines, and other fuel suppliers.
Short sellers are concerned about World Kinect Corporation (NYSE:WKC)’s land business, which continues to struggle. In 2Q 2024, gross profit from its land business came in at $80.8 million, exhibiting a decline of 28%. This was mainly because of unfavorable market conditions in North America and Brazil, and lower profit contribution from the company’s natural gas business due to oversupplied market conditions and lower market volatility. Even in the Marine business, its gross profit saw a decline of 13% to $36.7 million mainly because of reduced market volatility YoY.
However, Wall Street analysts believe that World Kinect Corporation (NYSE:WKC) appears to be well-placed for long-term growth. The company sharpened its portfolio via the sale of Avinode. It plans to streamline its Land portfolio for increased ratability and improved operating leverage. Moreover, the company’s expertise in supply fulfillment, technological solutions, and focus on sustainability should continue to act as growth enablers. The cash proceeds from the sale of Avinode should help the company repay debt, and reduce leverage and interest expenses. These measures should translate into strong earnings and margin expansion in 2H 2024.
Therefore, a combination of deleveraging, focus on shareholder returns, and strong and ambitious 2026 guidance should help the company’s stock.
Considering the Wall Street analysts covering the shares of World Kinect Corporation (NYSE:WKC), the average price target stood at $29.00. Insider Monkey’s 2Q 2024 database revealed that 16 hedge funds were long World Kinect Corporation (NYSE:WKC), with total stakes amounting to $70.4 million.
While we acknowledge the potential of WKC as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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