Categories AlphaGraphs, Analysis, U.S. Markets News

Airline stocks set to soar into 2019

Airline stocks have remained mostly grounded this year, with the exception of United Airlines (UAL), which grew 46% year-to-date, defying the pricing pressures, higher labor costs, and fuel price inflation that have plagued its rivals.  United, the world’s third-largest airline by revenue, was primarily helped by market-beating results in all three quarters this year.

airline stocks going into 2019
Photo by damian hutter on Unsplash

However, the story wasn’t so rosy for the others. So far this year, American Airlines (AAL) has plunged 32%, while JetBlue (JBLU) fell 19%. On the other hand, Delta Air Lines (DAL) has been mostly flattish. October marked the worst performance period for the industry this year due to mixed earnings results and broad-based geographic sell-off.

The industry fell as much as 14% during October, led by a 21% fall in Southwest Airlines (LUV), though there was not enough logical backing to LUV’s wide post-earnings dip. The company had reported reasonably fair results, but investors were apparently spooked by the management’s prediction that it expects modest inflation in costs other than fuel and profit-sharing expenses.

Airline-stock-movement-

However, at least two analysts think the worst is over for the airline industry, which will soon soar into 2019. JPMorgan analyst Jamie Baker’s findings are backed by the optimism seen so far this month. All airline stocks have been on a recovery path this month, with Jetblue reporting the highest growth rate of 8.3%.

In a recent investor note, Baker said, the “case for industry margin expansion remains the best we’ve seen in four years.” Along with the investor note, the rating firm downgraded United Airlines, Spirit Airlines (SAVE) and Southwest Airline, but upgraded Jetblue.

JetBlue Q3 earnings top estimates while revenues come in line

Macquarie analyst Susan Donofrio is also bullish on the industry and predicts that margin expansion, higher travel demand, and capacity discipline would lift airline stocks going into next year.

 

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

CCL Earnings: Carnival Corp. Q4 2024 revenue rises 10%

Carnival Corporation & plc. (NYSE: CCL) Friday reported strong revenue growth for the fourth quarter of 2024. The cruise line operator reported a profit for Q4, compared to a loss

Key metrics from Nike’s (NKE) Q2 2025 earnings results

NIKE, Inc. (NYSE: NKE) reported total revenues of $12.4 billion for the second quarter of 2025, down 8% on a reported basis and down 9% on a currency-neutral basis. Net

FDX Earnings: FedEx Q2 2025 adjusted profit increases; revenue dips

Cargo giant FedEx Corporation (NYSE: FDX), which completed an organizational restructuring recently, announced financial results for the second quarter of 2025. Second-quarter earnings, excluding one-off items, were $4.05 per share,

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top