Market Overview

Vetr Crowd Downgrades Republic Airways Amid Airline Weakness

Share:
  • Shares of Republic Airways Holdings Inc. (NASDAQ: RJET) tumbled more than 71 percent year-to-date.
  • The stock lost roughly 26 percent in the month of November.
  • Amid such weakness and a more widespread feebleness in the airline industry, the Vetr crowd issued a 1.5 star rating on shares of Republic Airways.

The Vetr crowd seems quite bearish on No. 2 regional airline operator Republic Airways. On Friday, the crowd issued a 1.5 star rating on the stock, even though 71 percent of the crowd's ratings are bullish.

The 1.5 star rating is accompanied by a $3.74 crowd price target, which implies a downside of more than 11 percent from current valuations.

Why So Weak?

In a recent The Motley Fool article, Adam Levine-Weinberg explained the recent weakness of Republic Airways' stock. To understand it, investors should look at "CEO Bryan Bedford's downbeat commentary about the company's near-term outlook during its Q3 earnings call last month."

Related Link: Vetr Crowd Downgrades Jet Blue: Here's Why

"Many investors had hoped that after Republic Airways' pilots ratified a new contract agreement in late October, profitability would soon return to normal. Bedford made it clear that there's still a lot of work to be done. Most notably, Republic's pilot staffing shortage got a lot worse during Q3 and the first few weeks of October, reducing aircraft utilization. The pilot pay increase will put additional pressure on Republic's costs," the author added.

But it's not only Republic Airways that has been struggling lately. Earlier this week, Southwest Airlines Co (NYSE: LUV) cautioned that "its fourth quarter 2015 operating revenue per available seat mile (RASM) will be approximately flat to down 1.0 percent year-over-year." Following this announcement, a ripple effect across the airline sector was unleashed, causing many major airliners' stocks to decline substantially.

Disclosure: The author holds no positions in any of the securities mentioned above.

Latest Ratings for RJET

DateFirmActionFromTo
Jan 2016Deutsche BankDowngradesBuyHold
Sep 2015Imperial CapitalMaintainsOutperform
Sep 2015Deutsche BankUpgradesHoldBuy

View More Analyst Ratings for RJET
View the Latest Analyst Ratings

 

Related Articles (RJET + LUV)

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Posted-In: Adam Levine-Weinberg The Motley FoolAnalyst Color Downgrades Price Target Crowdsourcing Analyst Ratings General

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