After collapsing by 71% between mid-February and early April, global flight numbers are once again increasing, rising 162% between April 12 and May 21. This improvement overstates the pick-up in the number of passengers as flights…
US airlines have encountered great turbulence due to COVID-19. They trade at a large discount to the S&P 500. Moreover, they have become massively oversold. While a short-term bounce is possible, it is unlikely to be more…
Yesterday, BCA Research's US Equity Strategy service reiterated its overweight stance on the S&P airlines index. Airline stocks have taken it on the chin lately on the back of COVID-19 demand destruction fears, but…
Highlights Portfolio Strategy Most of the macro and operating indicators we track are sending conflicting messages on the anticipated direction in the cyclical/defensive ratio. Stay on the sidelines on cyclicals versus defensives.…
Neutral - Downgrade Alert The transportation industry is a bellwether for the economy as rising freight hauling services demand is synonymous with firming economic activity and vice versa. The recent FedEx earnings report…
Overweight-Downgrade Alert Airline stocks bounced off a critical support level on the back of encouraging profit results (top panel). Lower kerosene prices especially for the non-hedged carriers are flowing straight to the…
When our U.S. Equity Strategy team moved to an overweight recommendation on the S&P airlines index last year, they noted three pillars supporting the onset of an earnings outperformance: a drubbing in oil prices significantly…
Overweight (Downgrade Alert) When we moved to an overweight recommendation on the S&P airlines index in the fall of last year, we noted three pillars supporting the onset of an earnings outperformance: a drubbing in oil prices…
Overweight With a pickup in oil prices in general and jet fuel prices in particular, a logical inference would be a decline in airlines’ earnings power (second panel). However, the revenue side of the equation has…
Overweight The Q4 earnings season has become dramatic in the airlines sector as the S&P airlines index is fairly evenly split with positivity and negativity. On the positive front, both LUV and AAL delivered guidance ahead…