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The Zacks Analyst Blog Highlights JetBlue Airways, Norfolk Southern, Old Dominion Freight Line and American Airlines
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For Immediate Release
Chicago, IL – January 25, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JetBlue Airways (JBLU - Free Report) , Norfolk Southern Corp. (NSC - Free Report) , Old Dominion Freight Line (ODFL - Free Report) and American Airlines (AAL - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
4 Transportation Stocks Likely to Surpass Q4 Earnings Estimates
The widely diversified Zacks Transportation sector, housing airlines, railroads, trucking and shipping companies, among others, continues to be aided by improved freight demand and the rebound in demand for air travel after enduring pandemic lows.
These positives contributed to the results of the handful of sector participants who have already reported fourth-quarter 2022 results. The same tailwinds should help entities like JetBlue Airways, Norfolk Southern Corp., Old Dominion Freight Line and American Airlines post better-than-expected earnings per share for the December quarter.
Let's delve deep into the factors that are likely to boost the fourth-quarter results of the sector participants who are yet to announce earnings.
Despite headwinds like supply-chain woes and inflationary pressures, freight demand has been impressive. This has supported growth of sector participants like NSC and ODFL. On a seasonally adjusted basis, Cass Freight shipments Index improved 1.2% month over month in December. The index improved on a seasonally adjusted basis month over month in two (October and December) of the three months of the fourth quarter. Upbeat crude and product tanker rates should aid the results of the shipping companies in the December quarter.
Even though economies are reopening, consumers' urge for online shopping refuses to relent. Apart from consumer habits, the digitalization-related trend is helping e-commerce demand stay strong.
Another major positive is the stronger-than-expected recovery in air-travel demand. People are again resorting to air travel as they resume their normal activities. Strong passenger volumes are likely to drive results of the yet-to-report airline companies. The presence of the Thanksgiving holiday period during the fourth quarter is likely to have boosted passenger volumes.
Our Earnings Preview report suggests that the transportation sector's quarterly earnings (considering S&P 500 participants only) are likely to increase 36.8% from the third-quarter 2022 actuals.
Here's How to Pick the Right Stocks
Against the current backdrop and amid a large number of transportation stocks, it is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings.
While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Upbeat air-travel demand is expected to have aided the fourth-quarter performance of this low-cost carrier. JBLU's earnings surpassed the Zacks Consensus in two of the last four quarters (missing the consensus mark in the other two), the average miss being 80.97%.
Norfolk Southern has an Earnings ESP of +1.33% and a Zacks Rank #3. NSC will release results on Jan 25.
We expect the upbeat demand scenario to have aided NSC's fourth-quarter performance. The intermodal and merchandise segments are expected to have been the main growth drivers. NSC's earnings surpassed the Zacks Consensus in each of the last four quarters by an average of 4.06%.
Old Dominion Freight has an Earnings ESP of +1.33% and a Zacks Rank #3. NSC will release results on Feb 1.
We expect ODFL's fourth-quarter performance to have been aided by an increase in less than truckload (LTL) tons per day and a rise in LTL revenue per hundredweight. ODFL's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters by an average of 8.39%.
American Airlines has an Earnings ESP of +9.79% and a Zacks Rank #2. AAL will release results on Jan 26.
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted American Airlines' top-line performance in the to-be-reported quarter. Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn, boosting the top line. AAL's earnings surpassed the Zacks Consensus in three of the last four quarters (missing the consensus mark in the other one), with the average beat being 8.62%.
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights JetBlue Airways, Norfolk Southern, Old Dominion Freight Line and American Airlines
For Immediate Release
Chicago, IL – January 25, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JetBlue Airways (JBLU - Free Report) , Norfolk Southern Corp. (NSC - Free Report) , Old Dominion Freight Line (ODFL - Free Report) and American Airlines (AAL - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
4 Transportation Stocks Likely to Surpass Q4 Earnings Estimates
The widely diversified Zacks Transportation sector, housing airlines, railroads, trucking and shipping companies, among others, continues to be aided by improved freight demand and the rebound in demand for air travel after enduring pandemic lows.
These positives contributed to the results of the handful of sector participants who have already reported fourth-quarter 2022 results. The same tailwinds should help entities like JetBlue Airways, Norfolk Southern Corp., Old Dominion Freight Line and American Airlines post better-than-expected earnings per share for the December quarter.
Let's delve deep into the factors that are likely to boost the fourth-quarter results of the sector participants who are yet to announce earnings.
Despite headwinds like supply-chain woes and inflationary pressures, freight demand has been impressive. This has supported growth of sector participants like NSC and ODFL. On a seasonally adjusted basis, Cass Freight shipments Index improved 1.2% month over month in December. The index improved on a seasonally adjusted basis month over month in two (October and December) of the three months of the fourth quarter. Upbeat crude and product tanker rates should aid the results of the shipping companies in the December quarter.
Even though economies are reopening, consumers' urge for online shopping refuses to relent. Apart from consumer habits, the digitalization-related trend is helping e-commerce demand stay strong.
Another major positive is the stronger-than-expected recovery in air-travel demand. People are again resorting to air travel as they resume their normal activities. Strong passenger volumes are likely to drive results of the yet-to-report airline companies. The presence of the Thanksgiving holiday period during the fourth quarter is likely to have boosted passenger volumes.
Our Earnings Preview report suggests that the transportation sector's quarterly earnings (considering S&P 500 participants only) are likely to increase 36.8% from the third-quarter 2022 actuals.
Here's How to Pick the Right Stocks
Against the current backdrop and amid a large number of transportation stocks, it is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings.
While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Our Choices
JetBlue Airways has an Earnings ESP of +6.77% and a Zacks Rank #3. JBLU will release results on Jan 26. You can see the complete list of today's Zacks #1 Rank stocks here.
Upbeat air-travel demand is expected to have aided the fourth-quarter performance of this low-cost carrier. JBLU's earnings surpassed the Zacks Consensus in two of the last four quarters (missing the consensus mark in the other two), the average miss being 80.97%.
Norfolk Southern has an Earnings ESP of +1.33% and a Zacks Rank #3. NSC will release results on Jan 25.
We expect the upbeat demand scenario to have aided NSC's fourth-quarter performance. The intermodal and merchandise segments are expected to have been the main growth drivers. NSC's earnings surpassed the Zacks Consensus in each of the last four quarters by an average of 4.06%.
Old Dominion Freight has an Earnings ESP of +1.33% and a Zacks Rank #3. NSC will release results on Feb 1.
We expect ODFL's fourth-quarter performance to have been aided by an increase in less than truckload (LTL) tons per day and a rise in LTL revenue per hundredweight. ODFL's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters by an average of 8.39%.
American Airlines has an Earnings ESP of +9.79% and a Zacks Rank #2. AAL will release results on Jan 26.
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted American Airlines' top-line performance in the to-be-reported quarter. Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn, boosting the top line. AAL's earnings surpassed the Zacks Consensus in three of the last four quarters (missing the consensus mark in the other one), with the average beat being 8.62%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar
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Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.