Back to top

Image: Shutterstock

Disney and Airbnb Earnings: Buy Reopening Stocks Amid Tech Pullback?

Read MoreHide Full Article

On today’s episode of Full Court Finance at Zacks we look at some of the recent economic data that’s provided mixed signals about the pace of the U.S. comeback. The episode then dives into Disney (DIS - Free Report) and Airbnb (ABNB - Free Report) ahead of their upcoming earnings releases to see if investors should think about buying the stocks.

The U.S. economy added only 266,00 new jobs in April to fall well short of projections that called for roughly 1 million. The dramatic slowdown in hiring could set back the economy after Q1 GDP surged 6.4%.

Economists and analysts have provided multiple possibilities for the big miss. Some of the reasons for the disappointing numbers likely stem from a combination of expanded unemployment benefits, child-care setbacks amid school closures, and lingering coronavirus fears.

The April jobs data will hopefully prove to be a speed bump on the road to recovery. Aside from the big miss, most of the other economic data, as well as corporate earnings have highlighted a rejuvenated U.S. economy poised to expand in 2021 and beyond. The rebound is supported by economic reopenings throughout the U.S., with more than 40% of all U.S. adults fully vaccinated and the daily number of new Covid-19 cases on the decline.

The tech selling continued Monday, after the Nasdaq popped Friday, with the technology-heavy index down over 2% through late-afternoon trading, as investors drop high-flyers and growth names ahead of another busy week for corporate earnings (also read: Earnings Boom for Housing and Construction).

This brings us to Disney and Airbnb, who are both set to report after the closing bell on Thursday, May 13. Disney stock has soared over 70% in the past year to easily outpace the S&P 500’s 50% climb, despite movie theater and theme park closures, as Wall Street looked to streaming TV growth. Disney has quickly amassed over 100 million subscribers to Disney+ as it aims to grow alongside Netflix (NFLX - Free Report) , Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , HBO Max (T - Free Report) , and others.

On top of that, the entertainment titan reopened its California parks at the end of April and more people are returning to movie theaters. Meanwhile, Airbnb shares have tumbled in the run-up to its Q1 financial release on May 13. The new-age vacation rental company soared way above its IPO price back in December and its 2020 results were not as disappointing as many had projected given the economic conditions and restrictions

Still, the question is how will Airbnb, which instantly became more valuable than the combined market value of Marriott (MAR - Free Report) , Hilton (HLT - Free Report) and Hyatt (H - Free Report) , perform in the near-term as international travel remains largely hamstrung by the coronavirus.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

AccessZacks Top 10 Stocks for 2021 today >>