Details Cookies
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Travel is back, PayPal disappoints, Cannabis gains on Republican bill Travel is back, PayPal disappoints, Cannabis gains on Republican bill Travel is back, PayPal disappoints, Cannabis gains on Republican bill

Travel is back, PayPal disappoints, Cannabis gains on Republican bill

Equities 7 minutes to read
Peter Garnry

Head of Equity Strategy

Summary:  In today's equity update we look at travel stocks gaining this month on better than expected earnings. PayPal reported a weaker than expected guidance confirming the latest rout in its share price. Lastly, Cannabis stocks were soaring yesterday on Republican bill.

Travel overall is doing better than feared in Q3

Expedia and Airbnb both delivered strong earnings last week with Expedia showing Q3 adj. EPS $3.53 vs est. $1.63 on stronger than expected revenue and Airbnb delivered Q3 adj. EBITDA $1.1bn vs est. $817mn on revenue coming in 10% above estimates at $2.24bn, despite lower gross booking value than estimated, but overall Airbnb’s result in Q3 was much better than feared given rising Covid-19 cases in the developed world. Our travel equity basket is the fifth best performing basket this month up 6.5%. Despite this month’s gains the travel industry is still impacted and the one that will take the longest to fully recover from the pandemic.

Travel basket
NameIndustryMarket Cap (USD mn.)FY22 Sales growth (%)Diff to PT (%)24M Fwd EV/EBITDA5yr return
Boeing Co/TheAirliner manufacturer130,86915.617.615.762.7
Airbus SEAirliner manufacturer106,3405.019.18.8121.7
Airbnb IncBooking platform127,28174.4-3.152.4NA
Booking Holdings IncBooking platform108,40259.23.215.769.8
Marriott International Inc/MDHotel chain54,84226.3-3.816.9140.4
Hilton Worldwide Holdings IncHotel chain42,13434.5-1.818.5222.1
Southwest Airlines CoAirlines30,40769.422.55.722.4
Amadeus IT Group SATravel software33,36930.8-2.815.268.8
Carnival CorpCruise lines27,587-63.415.48.5-44.7
Delta Air Lines IncAirlines28,57767.321.56.15.2
Aena SME SAAirport Services26,12510.93.312.734.1
Expedia Group IncBooking platform28,55265.01.111.358.1
Royal Caribbean Cruises LtdCruise lines23,876-17.4-0.811.126.9
Ryanair Holdings PLCAirlines23,355224. Group LtdBooking platform19,83812.419.215.6-24.1
Sydney AirportAirport Services16,839-26.19.525.669.4
Huazhu Group LtdHotel chain15,56629.424.218.6329.5
Air China LtdAirlines17,32826.718.16.919.2
Vail Resorts IncSki resorts14,70831.9-3.117.6158.9
China Southern Airlines Co LtdAirlines16,63819.315.37.915.4
Aeroports de ParisAirport Services14,12220.8-9.713.346.5
Shanghai International Airport Co LtdAirport Services15,055-
International Consolidated Airlines Group SAAirlines11,87612.521.85.1-24.2
Host Hotels & Resorts IncHotel REITs13,12468.42.113.435.1
InterContinental Hotels Group PLCHotel chain13,01438.4-3.815.476.2
Norwegian Cruise Line Holdings LtdCruise lines10,450-
Accor SAHotel chain10,09835.13.613.75.1
Whitbread PLCHotel chain9,174167.97.712.619.8
Choice Hotels International IncHotel chain8,42839.4-12.920.0220.2
TravelSky Technology LtdTravel software5,26718.136.06.7-13.4
Grupo Aeroportuario del Sureste SAB de CVAirport Services6,24733.86.110.560.1
TUI AGTravel agency5,569-29.8-18.06.5-43.2
Travel + Leisure CoHospitality services5,03440.522.58.7121.5
TripAdvisor IncBooking platform4,81854.219.510.3-24.4
Park Hotels & Resorts IncHotel REITs4,91659.49.411.9NA
Sabre CorpTravel software3,32826.818.614.4-52.9
Flight Centre Travel Group LtdTravel agency3,119176.9-9.69.7-6.6
MakeMyTrip LtdBooking platform3,715151.52.150.537.7
On the Beach Group PLCBooking platform679-38.128.810.740.7
Airtrip CorpTravel agency832-15.12.8NA195.0
Aggregate figures (sum or median)1,041,49830.16.912.636.4
Source: Bloomberg and Saxo Group

Weak guidance sends PayPal shares down

Investors were initially focused on PayPal’s Q3 result showing EPS ahead of estimates and revenue a bit below estimates, but the Venmo partnership with Amazon allowing customers to pay on Amazon with their Venmo app, kickstarted the initial positive sentiment. But then investors realized the big miss on Q4 revenue guidance at $6.85-6.95 vs est. $7.24bn, showing revenue growth is coming down to 14% y/y slightly up from Q3 at 13% y/y, but substantially below the company’s own guided long-term growth rate of 20%. Operating margin was not improving either falling for the second straight quarter. PayPal shares were 5% lower in extended trading extending this year’s drawdown to 31%. Our payment equity basket is the worst performing basket this month.

Source: Saxo Group

Rumours of House Republican bill legalizing cannabis

It is what the cannabis industry has been waiting for, but yesterday rumours suggested that House Republicans are expected to introduce a reform bill removing cannabis from the controlled substances act, which basically means that it will no longer be criminal on a federal level. Essentially the regulation would be more like the current regulation of alcohol. While still a rumour and an initial draft, it was enough to please investors yesterday sending our cannabis equity basket up 7.6% and 10.2% this month.

Besides the good news on the legislative side of the industry, one of the largest companies in the industry Canopy Growth reported very disappointing earnings with Q3 revenue at $131mn down 3% y/y and gross margin plunging to -54.2% from 20% in Q2 driven by an inventory write-down as consumers’ preferences changed during the quarter towards higher end products. This is a major negative for investors and the industry which is still battling with showing profitability.

Source: Bloomberg

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (
- Full disclaimer (

Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.