What Are Cyclical Stocks?
For the unaware, cyclical stocks are companies that are sensitive to the ups and downs of the business cycle. These stocks tend to perform well during periods of economic expansion when consumer spending and business investment are on the rise. However, they may also experience significant declines during economic downturns or recessions, as consumers and businesses cut back on spending.
Cyclical stocks are often found in industries such as consumer discretionary, industrials, materials, and energy. Consumer discretionary stocks include companies that provide goods and services that are considered non-essential, such as retail, entertainment, and travel. Investing in cyclical stocks can be a way for investors to take advantage of the economic cycle and potentially earn higher returns.
However, they also carry a higher risk than defensive stocks, which are companies that tend to perform well regardless of economic conditions. Investors should carefully consider their risk tolerance and investment goals before investing in cyclical stocks. Having said that, let’s dive into three cyclical stocks to watch in the stock market right now.
Cyclical Stocks To Watch Right Now
- Airbnb Inc. (NASDAQ: ABNB)
- Uber Technologies Inc. (NYSE: UBER)
- Marriott International, Inc. (NASDAQ: MAR)
Airbnb (ABNB Stock)
Leading off, Airbnb (ABNB) is an online marketplace and hospitality service that allows individuals to rent out their homes and apartments to travelers. The company operates in over 220 countries and has over 6.6 million listings worldwide as of 2022. In addition to traditional accommodations, Airbnb also offers unique experiences and activities hosted by locals.
Back in February, Airbnb announced better-than-expected Q4 2022 earnings results. In detail, the company posted earnings of $0.48 per share, along with revenue of $1.9 billion in the 4th quarter of 2022. This is versus analysts’ consensus estimates on the quarter was an EPS of $0.27, on revenue estimates of $1.9 billion. What’s more, Airbnb also notched in a 24.1% increase in revenue versus the same period, the previous year.
Since the start of 2023, shares of ABNB stock have advanced by 34.22% year-to-date. Meanwhile, as of Thursday’s closing bell, ABNB stock closed the trading day green by 1.36% at $113.95 a share.
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Uber Technologies (UBER Stock)
Next, Uber Technologies (UBER) is a technology company that operates a ride-sharing platform connecting drivers with passengers. The company has expanded into other areas including food delivery (Uber Eats) and freight logistics (Uber Freight).
Meanwhile, earlier this week, Uber announced when it will release its Q1 2023 financial and operating results. In detail, the company reported that it will release its first quarter 2023 results on Tuesday, May 2, 2023, ahead of the opening of the U.S. stock market. To briefly recap, in the previous quarter, Q4 2022, UBER reported earnings of $0.29 per share, along with revenue of $8.6 billion.
Year-to-date, Uber stock has increased by 23.97% so far. While, on Thursday, shares of UBER stock finished the day up 2.78%, at $31.44 a share.
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Marriott International (MAR Stock)
Finally, Marriott International (MAR) is a multinational hospitality company that operates and franchises a broad portfolio of hotels and related lodging facilities. The company operates over 30 hotel brands across over 140 countries and territories, with over 7,800 properties and more than 1.4 million rooms. Marriott’s brands include well-known names such as Ritz-Carlton, St. Regis, and W Hotels.
On Monday of this week, Marriott International announced that it will release its first quarter 2023 earnings results on May 2, 2023, at approximately 7:00 am Eastern Time (ET). The company will also host a conference call for the investment community on the same day at 8:30 am ET. During the call, the company’s executives will discuss Marriott’s financial performance and answer questions from investors. Meanwhile, last quarter Marriott notched in earnings of $1.96 per share on revenue of $5.9 billion.
In 2023 thus far, Marriott stock has gained by 12.01% year-to-date. Additionally, on Thursday, shares of MAR stock finished the day up 2.50% at $165.50 a share.
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