The airline sector, which includes companies providing passenger and cargo air transport services, plays a crucial role in global travel. Influenced by economic conditions, oil prices, and geopolitical events, this industry is characterized by its cyclicality. Airlines’ profitability is closely tied to the global economy’s health, often operating on thin profit margins. These factors make the financial performance of airlines sensitive to external influences, reflecting the sector’s inherent volatility.
Investing in airline stocks presents a unique mix of advantages and challenges. These stocks can offer substantial growth during economic upswings and increased travel demand, making them attractive for tactical investments. However, they are also vulnerable to fuel price volatility, regulatory shifts, and unexpected events like pandemics. This susceptibility can cause significant price fluctuations. Taking all of this into consideration, here are three airline stocks to watch in the stock market this week.
Airline Stocks To Buy [Or Avoid] Now
- Delta Air Lines Inc. (NYSE: DAL)
- American Airlines Group Inc. (NASDAQ: AAL)
- United Airlines Holdings Inc. (NASDAQ: UAL)
Delta Airlines (DAL Stock)
To start, Delta Air Lines Inc. (DAL) is a major American airline, recognized as one of the world’s largest airlines by fleet size and passenger volume. Delta operates over 5,400 flights daily, serving an extensive domestic and international network that includes over 300 destinations in more than 50 countries.
Back in October, Delta Airlines announced better-than-expected Q3 2023 financial results. Getting right into it, the company posted an EPS of $2.03 with revenue for the quarter of $15.49 billion. This is compared to analysts’ consensus estimates for the third quarter of 2023 which were an EPS of $1.92 per share, and revenue estimates of $15.10 billion. Additionally, revenue advanced by 10.83% versus the same period, the previous year.
Year-to-date, shares of Delta stock have increased by 26.46% so far. While, during Monday’s late morning trading session, DAL stock is trading red on the day thus far by 2.60%, trading at $41.24 a share.
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American Airlines Group (AAL Stock)
Second, American Airlines Group Inc. (AAL) is a significant player in the global aviation industry. As one of the largest airlines globally, it operates a comprehensive international and domestic network with nearly 6,800 flights per day to almost 350 destinations in more than 50 countries.
Just this month, American Airlines announced its inclusion in the Dow Jones Sustainability World Index (DJSI World) for the first time. This recognition places them as one of only two passenger airlines featured in the Index. Additionally, American Airlines is returning to the Dow Jones Sustainability North America Index (DJSI North America) for the third consecutive year. The DJSI World is composed of global leaders in sustainability, representing the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index, evaluated on economic, environmental, and social criteria.
In 2023 so far, shares of AAL stock have gained by 10.44% YTD. Meanwhile, during Monday’s late morning trading session, American Airlines stock is trading down on the day by 2.90%, currently trading at $14.07 a share.
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United Airlines Holdings (UAL Stock)
Finally, United Airlines Holdings Inc. (UAL) is a major American airline with headquarters in Chicago, Illinois. United operates a large domestic and international route network, with an extensive presence in the Asia-Pacific region. The company operates approximately 4,900 flights a day to 362 airports across five continents.
In October, United Airlines reported a beat for its third quarter 2023 financial results. In detail, the airline company reported earnings of $3.65 per share, with revenue of $14.48 billion. For context, this is in comparison with Wall Street’s estimates for the quarter which were an EPS of $3.40 and revenue of $14.44 billion. With that, revenue for the quarter increased by 12.48% compared to the same period, the prior year.
So far in 2023, shares of United Airlines stock have surged by 13.73% YTD. Moreover, during Monday’s late morning trading action, UAL stock is trading lower on the day by 2.89%, at $42.32 a share
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