13 Gaming And Lodging Stocks To Buy On The Omicron Dip

Gaming and lodging stocks took a big hit on Friday following news of the new omicron variant of COVID-19. Despite that, Bank of America analyst Shaun Kelley said Monday there are plenty of gaming and lodging stocks to buy on the dip heading into 2022.

Gaming Picks: In the casino space, Kelley is still expecting Las Vegas revenues to grow more than 20% in 2022, while regional U.S. casino revenue will rise in the mid-single digits. Kelley said Macau remains a “black box” for investors with significant recovery potential and real risks from COVID-19, concession renewals and an ongoing regulatory crackdown that resulted in 10 junket operator arrests last week.

Related Link: If You Invested $1,000 In Penn National Gaming Stock One Year Ago, Here's How Much You'd Have Now

Among casino stocks, Kelley named Boyd Gaming Corporation (NYSE: BYD) his top value stock pick, Churchill Downs, Inc. (NASDAQ: CHDN) his top organic growth stock pick, Caesars Entertainment Inc (NASDAQ: CZR) his best-of-breed stock pick and VICI Properties Inc (NYSE: VICI) his top stock pick for yield investors.

Kelley is projecting online gaming revenue will grow 41% in 2022, driven by expansion into new states, including New York.

“Encouragingly, we raised our near-term TAM twice in 2021, as productivity (win per adult) is exceeding expectations,” Kelley said.

Kelley named Sportradar Group AG (NASDAQ: SRAD) his top “pick and shovel” stock for broad exposure to the online gambling space, Caesars his top stock pick for online market share gains and Penn National Gaming, Inc (NASDAQ: PENN) his top value stock pick.

Lodging Picks: Finally, Bank of America is expecting lodging RevPAR to fully recover to 2019 levels in 2022, gaining 15% year-over-year. The firm’s top stock picks in the space include Hilton Hotels Corporation (NYSE: HLT), Marriott International Inc (NASDAQ: MAR), Wyndham Hotels & Resorts Inc (NYSE: WH), Choice Hotels International Inc (NYSE: CHH), Ryman Hospitality Properties Inc (NYSE: RHP), Pebblebrook Hotel Trust (NYSE: PEB) and Apple Hospitality REIT Inc (NYSE: APLE).

Benzinga’s Take: The 2022 outlook for gaming and lodging stocks was a lot clearer a week ago before the discovery of the new COVID-19 variant. The next couple of weeks could be critical as investors get more information on the deadliness of the new variant and the efficacy of existing vaccines against it.

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