Categories AlphaGraphs, Analysis, Markets

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.


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

Key highlights from Autodesk (ADSK) Q4 2021 earnings results

Autodesk, Inc. (NASDAQ: ADSK) today reported its fourth quarter financial results for the period ended January 31, 2021. Net income for the fourth quarter was $911.3 million, or $4.10 per

Infographic: Beyond Meat (BYND) reports wider Q4 loss; Revenue up 4%

Beyond Meat (NASDAQ: BYND), a specialist in plant-based meat substitutes, Thursday reported a wider loss for the fourth quarter, despite an increase in revenues. The numbers also missed the consensus

Virgin Galactic stock tanks on delayed test flight

Virgin Galactic (NYSE: SPCE) reported fourth-quarter 2020 financial results after the regular market hours on Thursday. The space tourism company reported zero revenue in the fourth quarter, compared to $529,000

Add Comment
Viewing Highlight