To The Moon

December is typically a strong month for stocks, with a strong holiday spirit and support for travel plans, especially for travel stocks. Do you have any travel plans for the upcoming vacation? It's been a rocky and muted recovery for many of the top travel and leisure stocks that fell at the hands of the pandemic. Here are some travel stocks continuing to separate themselves from the pack. Each play has considerable upside in 2023 as firms look to move past lingering headwinds and worsening macroeconomic conditions from higher interest rates. $Booking Holdings(BKNG)$ Evercore ISI’s Mark Mahaney views Booking as one of the best-positioned stocks to weather a slowdown in travel demand heading into 2023. Despite tumbling 14% this year, Booking offers value to its shareholders and a “battle-tested management” team. The company’s careful approach to its cost structure and continued position as the largest player in the lodging space worldwide. Booking is a leader in the European market. Its heavy exposure to Europe comes with advantages. Most notably, the European market is better known for its smaller hotel chains compared to the U.S. or Canada. Booking can consolidate many smaller boutique hotels together on its platform that are harder to find via search engines. So, when it comes to Booking, there's a discovery aspect that makes it a tougher platform for rivals to top. Many travel businesses more favorably than other digital companies that benefitted from Covid-19 tailwinds and must now cut costs amid a weakening macro environment. Travel companies cut costs way early on, so they already go into this softening environment with lean and mean cost structures. $Delta Air Lines(DAL)$ The stock's 2020-21 rally faltered in 2022, with shares now down around 45% from their pre-pandemic heights. Indeed, there's a lot of room to run if Delta can make it through another year of challenges. Third-quarter earnings results were something to get excited about. Though Delta missed by the slightest of margins ($1.51 EPS vs. $1.53 consensus), air travel recovery demand was encouraging. Regardless, management has done a respectable job of managing lofty operating costs. It could take a while for investment in DAL stock to pay off, but with such a depressed 0.5x sales multiple, I think the risk/reward is as good as analysts think. Wall Street continues to favor Delta. The average DAL stock price target of $46.22 implies a whopping 31.7% in gains over the year ahead. $Walt Disney(DIS)$ Disney stock is back where it spent most of the early part of 2020. Recently, long-time CEO Bob Iger made his return to the House of Mouse after the sudden ousting of Bob Chapek. Undoubtedly, Chapek's performance has been abysmal, even with COVID-19 headwinds considered. Shares of Disney rallied around 6% following news of Bob Iger's return. Iger is expected to stay on for at least two years. That should be enough time to turn the tides around and reverse the changes put forth by Chapek. With rates on the rise and losses from streaming platform Disney+ mounting, Iger is likely to explore ways to enhance profitability prospects. Undoubtedly, Iger has his work cut out for him. At below $100 per share, I think the stock is deeply undervalued. The stock trades at a palatable 2.2x sales. Whether Iger can fix Chapek's mismanagement, though, remains to be seen. Wall Street is confident in Disney. The average DIS stock price target of $122.25 entails 23.65% gains for the year ahead. While winter travel has not been as strong as summer, there are reasons to believe travel and leisure stocks are still worth betting on over the long term. Which stock in the travel sector are you bullish on? Let us know what you think in the comments section~