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Recovery Acceleration Sends Theaters, Casinos and Airlines Higher

Stock Markets52 minutes ago (Apr 05, 2021 10:22AM ET)

(C) Reuters

By Christiana Sciaudone — Jobs, movies, gambling, air travel, oh my!

Recovery stocks rallied after a jobs report that blew expectations out of this world as we went back to the theaters, Vegas is poised to boom and we scratch that international travel itch.

AMC Entertainment (NYSE:AMC) and Cinemark rose 7% and 3%, respectively, after the best weekend at the box office since the world came to a halt more than a year ago.

MGM Resorts (NYSE:MGM) and Caesars (NASDAQ:CZR) Entertainment increased 6% and 3.5%, respectively, as Morgan Stanley (NYSE:MS) said the Vegas recovery is coming on faster and stronger than expected. And JetBlue rose 4.3% after getting a bump from Raymond James on, you guessed it, the anticipated recovery of air travel.

It all started Friday with a jobs report that nonfarm payrolls rose 916,000 compared to an expectation of 660,000, bringing hope to us all that a recovery is truly on its way alongside vaccinations spreading to younger populations.

Then we got “Godzilla vs. Kong,” which drew the largest weekend crowds to theaters since Covid shut the world down last March (in case you forgot). Ticket sales of about $32 million were reported between Friday and Sunday in North America and about $49 million over the five-day Good Friday holiday period, Bloomberg reported, citing Comscore.

Meanwhile, Morgan Stanley upgraded MGM Resorts to a buy-equivalent from a neutral-equivalent, boosting its price target to $45 from $34, according to StreetInsider.

“Our channel checks suggest the Vegas (~50% of mix) recovery is occurring faster and stronger than expected,” Morgan Stanley analyst Thomas Allen wrote in a note.

Goldman Sachs (NYSE:GS), however, maintained a sell rating, though it did bump its target price to $32 from $28, saying, “We continue to see a slower path to recovery versus other areas of our coverage and less upside from partial ownership of the rapidly growing Sports Betting business.”

The Goldman analyst says the following would be needed to have a more positive view: stronger convention trends in Las Vegas; improving visibility on Macau concessions and recovery trajectory; and the sustainability of momentum on the iGaming/online sports betting front.

In the skies, Raymond James analyst Savanthi Syth upgraded JetBlue to a buy-equivalent from a neutral-equivalent, citing earnings momentum and improving trends, including a recovery in near-international markets, MarketWatch reported. Syth said daily bookings almost doubled to as much as $12 million at the end of March from about $6 million early in the month.

“Pent-up demand to beach destinations continues, with near-international (i.e., Mexico/Caribbean) recovering following the sharp but short-lived drop-off when the U.S. implemented testing for international arrivals on Jan. 26,” Syth wrote in a note.

Pack that sunscreen and get ready for an umbrella drink.

Recovery Acceleration Sends Theaters, Casinos and Airlines Higher

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