Hot Picks: Strong consumer trends fuel optimism for gaming and leisure names

Analysts see room for further upside in the gaming and leisure sector as operators benefit from rising demand, expanding project pipelines and improving consumer trends.

BNN Bloomberg spoke with James Hardiman, senior vice-president and leisure analyst at Citi, who highlighted momentum across casinos, cruise lines and powersports makers, while outlining where he sees the strongest catalysts ahead.

Key Takeaways

• Wynn’s premium positioning helps it outperform in a K-shaped consumer environment.
• A major UAE resort slated for 2027 adds to Wynn’s long-term growth pipeline.
• Macau’s recovery and share-gain potential support the company’s outlook.
• Cruise demand continues to climb, lifting industry sentiment and Carnival’s prospects.
• BRP is positioned to gain share as off-road vehicle demand strengthens.

Read the full transcript below:

ROGER: And time now for Hot Picks. Wynn is a leading developer of luxury casino resorts, and it’s my next guest’s top stock pick. Joining me is James Hardiman, senior vice-president and leisure analyst at Citi. James, thanks, as always, for joining us.

JAMES: Thanks for having me.

ROGER: OK, I’m going to get the joke out of the way. You’re willing to gamble on Wynn. I’m done. Absolutely. I’ll show myself out.

JAMES: Well done, well done. Yes. So, I mean, the real thought behind Wynn is that they are a premium operator of premium properties that target premium customers. So much of what can explain what we’ve seen in our consumer discretionary coverage in recent years has been the idea of this K-shaped economy. And I get the question from investors all the time: what are the best-equipped companies to navigate such a divergence between the high end and the low end? I think Wynn is at the forefront of that ability.

As we think about the Las Vegas Strip — which is where they have one of their main properties — it was a rough summer on the Strip, but it was primarily those middle-income, value-oriented properties that really struggled. Wynn’s properties did quite well. They’ve got exposure to a recovering Vegas, but they’re also in pretty good shape today.

And as I think about their Macau business — Macau, China, where they have a couple of properties — that’s a market that has outperformed expectations this year. There are some real opportunities for Wynn to gain share there in the months to come.

ROGER: Yes — sorry, go ahead.

JAMES: The point I was going to make is there are some idiosyncratic factors. As you’ll see with all these top picks, these are companies that have exposure to trends we think are favourable, or a lack of exposure to trends we think are unfavourable. But in addition to that, there are company-specific factors.

For Wynn, that’s the fact they’re going to be opening the first casino in the Middle East. They’re going to be opening what’s called Wynn Al Marjan in the UAE in 2027, and that’s a big opportunity for them.

ROGER: I was just looking — with the China mention, Macau — and they even have a wine award. So they’re looking at different opportunities, right?

JAMES: That’s right. As you think about that premium customer and what they care about, and what’s going to move the needle for them, I think for decades Wynn has had its hand on the pulse of that customer. That is really paying dividends in the current environment.

ROGER: Now, any concerns about it being hit by any potential downturn in the markets?

JAMES: Look, they are, at the end of the day, a consumer company. If we see a broader recession, I think everything I cover — which, again, is consumer discretionary, and in a lot of cases, big-ticket consumer discretionary — is going to get hit. But as you think about what my job is, and what my counterparts’ jobs are, it’s picking relative winners and losers. As we think about their particular exposures, the customers they’re targeting — that’s a customer that’s going to outperform.

ROGER: I want to get to the other two you want to talk about. Carnival as well — it looks like the cruise lines are back?

JAMES: Yes — back and better than ever. And who would have guessed that a handful of years ago, when we were coming out of COVID and it felt like COVID was the existential threat to the cruise industry? So many people I talked to were already weary of going on a cruise. You’d hear, “I would never go on one of those things.”

Cruise consideration today is actually 50 per cent higher than it was in 2019. Take a moment. Take that in. You were looking at six in 10 Americans who would consider taking a cruise in 2019; now it’s more like nine in 10.

Actual penetration is way less than that, and therein lies the opportunity. People are considering it. Getting them across the finish line is a big opportunity. Carnival has exposure to a cruise industry that we think has a lot of secular tailwinds.

But in addition to that, they’ve got company-specific initiatives. Most notably, they just opened their own private island destination called Celebration Key. Twenty twenty-six will be the first full year they’ll have that island open, which brings a whole lot of benefits as you think about consumers’ interest in going on their particular cruises and to their destinations. Really compelling story there as well.

ROGER: I’m curious — from six in 10 to nine in 10 — is it that saying “there’s no such thing as bad publicity”? The pandemic scared everybody, but it also raised awareness of it?

JAMES: No, I think that was definitely bad. The concern that you were going to get stuck on a cruise ship or catch some communicable disease — I’d make the small exception that that press was bad press.

I think the cruise industry has gotten better in terms of the product it delivers. Part of that is these incremental offerings — these land-based islands. Most notably, Royal Caribbean opened what’s called Perfect Day at CocoCay, which has been an absolute home run.

All of these things have happened at a time when traditional vacations — land-based vacations — have arguably gotten worse. They’re more expensive. Hotels are more expensive. In many cases service levels have gone down because, as these hotels have had to deal with higher labour costs, they’ve cut back on staff.

ROGER: I’m going to jump in because I just want to get in the last one — BRP. Sorry, we’ve been talking a little too much. My apologies. Canadian manufacturer: snowmobiles, off-road vehicles, boats — one of my faves. What do you like about it?

JAMES: Great company, great management team — although the longtime CEO is stepping down and they’re in the midst of a CEO search. It’s a segment that seems like it’s gaining steam over the summer — off-road vehicles.

But it’s a company that we think, if there’s going to be a share gainer in this space over time, it’s going to be them. A great engineering-based company that makes great products, and we think will ultimately be a share winner.

ROGER: All right, we’re going to have to end there. James, thanks, as always, for joining us. Appreciate it.

JAMES: Thanks for having me.

ROGER: You too. Have a great weekend. James Hardiman, senior vice-president and leisure analyst at Citi.

---

This BNN Bloomberg summary and transcript of the Nov. 21, 2025 interview with James Hardiman are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.