Market Overview

Airline Stocks Could See 'Modest Relief' Soon

Airline Stocks Could See 'Modest Relief' Soon

Q1 numbers for leading U.S. airlines came in on the low end of the expected range, but the results may end up having an unexpected impact on airline stocks. According to JPMorgan analyst Jamie Baker, the weak results were not bad enough to justify the recent selloff in airline stocks.

“Given the absence of any bona fide ‘misses,’ diminished investor expectations may actually yield modest equity relief in the near term, given the potential for incremental capacity cuts and ‘less bad’ RASM commentary as earnings season soon gets under way,” Baker explained.

Related Link: Deutsche Bank Clients Are Worried The U.S. Is On The Edge Of A Recession

Despite a lower Q1 PRASM guidance range of -7.0 percent to -8.0 percent issued on Monday, JPMorgan raised its Q1 EPS estimate for Overweight-rated American Airlines Group Inc (NASDAQ: AAL) from $1.17 to $1.20.

The firm also raised its EPS outlook for Overweight-rated United Continental Holdings Inc (NYSE: UAL) from $1.04 to $1.18 following the company’s investor update last Friday that narrowed its Q1 PRASM guide range to between -7.25 percent and -7.75 percent.

Finally, JPMorgan upped its EPS estimate for Overweight-rated Delta Air Lines, Inc. (NYSE: DAL) from $1.26 to $1.32 after the company said last week that its Q1 PRASM would likely come in at the lower end of its previous guidance range of between -2.5 percent and -4.5 percent.

Disclosure: The author holds no position in the stocks mentioned.

Image Credit: Public Domain

Latest Ratings for DAL

Jan 2021Argus ResearchUpgradesHoldBuy
Jan 2021Vertical GroupUpgradesHoldBuy
Jan 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for DAL
View the Latest Analyst Ratings


Related Articles (DAL + AAL)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings News Guidance Travel Analyst Ratings Trading Ideas General Best of Benzinga

Latest Ratings

IBIOCantor FitzgeraldInitiates Coverage On3.0
UPLDCanaccord GenuityMaintains57.0
EJefferiesInitiates Coverage On
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at