https://money.usnews.com/investing/stock-market-news/slideshows/7-airline-stocks-to-buy-as-pricing-soars?src=usn_invested_nlSept. 11, 2018
The latest data on airline bookings from Bank of America suggests the uptick in summer domestic bookings and pricing continued in August. With airline stocks trading at some of the lowest earnings multiples in the market, value investors such as Warren Buffett have made big bets on the long-term outlook for airline stocks.
Bank of America analyst Andrew Didora says U.S. airlines are tracking to the high end of their third-quarter guidance ranges. Considering the positive pricing trends and the lapping of last year’s major hurricanes, Didora is bullish on the following seven airline stocks.
1. Allegiant Travel Co. (ticker: ALGT). Allegiant is a discount domestic airline with a clear business strategy. Allegiant has differentiated itself by flying unique routes and connecting cities that other larger airlines do not, often flying these routes just three or four times per week.
Didora says Allegiant’s transition to an all-Airbus fleet will improve the company’s reliability, maintenance costs and fuel efficiency. Didora is expecting third-quarter revenue per available seat mile to decline by 0.1 percent, but he still loves the stock in the long term. Bank of America has a “buy” rating and $185 price target for ALGT stock.
2. American Airlines Group (AAL). American Airlines is a beneficiary of an uptick in corporate travel, with two-thirds of its revenue coming from business travelers. Didora says American’s decision to cut both capacity and unit cost is a positive for investors. He is calling for third-quarter revenue per available seat mile growth of 3.5 percent, above the high end of the company’s guidance of between 1 percent and 3 percent.
Didora says revenue per available seat mile will continue to grow by 3.3 percent in the fourth quarter and 2 percent in 2019. Bank of America has a “buy” rating and $61 price target for AAL stock. – Wayne Duggan
Top Airline Stocks
Company Price 1 Year Return
Skywest Inc SKYW $61.95
66.16%
United Continental Holdings Inc UAL $88.09
45.70%
Spirit Airlines Inc SAVE $48.27
39.39%
Delta Air Lines Inc (DE) DAL $57.56
20.49%
Southwest Airlines Co LUV $62.51
17.69%
JetBlue Airways Corp JBLU $19.02
-1.86%
Alaska Air Group Inc ALK $68.15
-8.18%
American Airlines Group Inc AAL $39.43
-13.15%
Ryanair Hldgs ADR RYAAY $95.42
-17.96%
LATAM Air Grp ADR LTM
Comments
Regards,
Ted
https://www.morningstar.com/funds/xnas/fsaix/quote.html