Recent data suggests that there’s a global slowdown in spending on high-end luxury goods, such as handbags and clothing. However, that trend hasn’t yet worked its way to experiences for higher-income spenders.
That, combined with strong travel trends as the holiday season kicks off, suggests that companies that cater to these experiences still have more room to run. And that today’s investors can likely see solid returns on these companies well into next year.
For instance, hospitality data shows that travel and vacations remain strong. That bodes well for companies providing such an experience, such as Wynn Resorts (WYNN). The company’s hotels and casinos operate in Las Vegas and Macau, and is expanding in the UAE.
After bottoming out in the summer, shares are now starting to trend higher, but have more room to run. Shares trade at 11 times earnings, a big discount for a high-end luxury brand.
Action to take: With shares breaking off their lows but still cheap, investors may benefit from continued upside potential in the coming quarters ahead.
Plus, at current prices, Wynn pays a 1% dividend.
For traders, shares look ready to keep trending higher. The March 2025 $110 calls, last trading for about $2.65, could see mid-double-digit returns in the months ahead. Traders may want to take profits if the trade moves in-the-money before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.