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The Zacks Analyst Blog Highlights Delta Air Lines, American Airlines, United Airlines and JetBlue Airways
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For Immediate Release
Chicago, IL – November 28, 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: Delta Air Lines (DAL - Free Report) , American Airlines (AAL - Free Report) , United Airlines (UAL - Free Report) and JetBlue Airways (JBLU - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Airline Industry Jumps +17.7% in a Month: Here's Why
It is a well-documented fact that expenses on fuel represent a significant input cost for airlines. Therefore, the health of stocks in the Zacks Airline industry is inversely proportional to the movement of oil prices.
Oil prices were moving northward from July mainly due to the extension of production cuts by Saudi Arabia and Russia through the end of the current year. In fact, oil price surged 28.5% in the July-September period, in turn restricting bottom-line growth of many airline players in the third quarter of 2023.
Due to the northward movement of oil prices, average fuel price per gallon increased 10.3% sequentially at Delta Air Lines. Similarly, the metric increased 11%, 10.3% and 11.8% sequentially at American Airlines, United Airlines and JetBlue Airways, respectively, in third-quarter 2023. Of the abovementioned stocks, JetBlue currently carries a Zacks Rank #5 (Strong Sell), while the other three carry a Zacks Rank #3 (Hold), presently. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, oil prices have stopped moving northward over the past month and have in fact declined 8.5% in November so far. Factors like an increase in supply, record U.S. oil production and dispute among the OPEC+ group of exporters regarding agreement on any additional production cuts have contributed to the reduction in oil prices.
This southward movement in oil prices is a welcome development for airline stocks. This is reflected in the fact that the Zacks Airline industry has appreciated 17.7% in a month’s time, well above the S&P 500’s 9.4% rise in the same time period.
Record Thanksgiving Traffic: Another Positive
Coupled with the southward oil price movement, the buoyant passenger volumes witnessed during the ongoing Thanksgiving travel period are another positive for airlines that have led to the price surge.
A mind-boggling 30 million passengers are expected to be screened between Nov 17 and Nov 28, a record high, per the Transportation Security Administration. The decline in airfares supports the upbeat traffic projection.
Delta expects 6.2-6.4 million passengers to avail its flights in the Nov 17-28 timeframe. The forecast implies that 515,000-530,000 passengers are likely to fly per day. UAL expects to have recorded its busiest-ever Thanksgiving, with nearly 6 million people flying with the airline during the holiday travel period. American Airlines, too, has been attracting huge traffic during the ongoing Thanksgiving holiday season.
The record traffic during the Thanksgiving period, in addition to the decline in fuel costs, has provided the much-needed boost to airline stocks after a tough few months due to headwinds like high labor and fuel costs and a slowdown in domestic air travel demand.
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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.
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The Zacks Analyst Blog Highlights Delta Air Lines, American Airlines, United Airlines and JetBlue Airways
For Immediate Release
Chicago, IL – November 28, 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: Delta Air Lines (DAL - Free Report) , American Airlines (AAL - Free Report) , United Airlines (UAL - Free Report) and JetBlue Airways (JBLU - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Airline Industry Jumps +17.7% in a Month: Here's Why
It is a well-documented fact that expenses on fuel represent a significant input cost for airlines. Therefore, the health of stocks in the Zacks Airline industry is inversely proportional to the movement of oil prices.
Oil prices were moving northward from July mainly due to the extension of production cuts by Saudi Arabia and Russia through the end of the current year. In fact, oil price surged 28.5% in the July-September period, in turn restricting bottom-line growth of many airline players in the third quarter of 2023.
Due to the northward movement of oil prices, average fuel price per gallon increased 10.3% sequentially at Delta Air Lines. Similarly, the metric increased 11%, 10.3% and 11.8% sequentially at American Airlines, United Airlines and JetBlue Airways, respectively, in third-quarter 2023. Of the abovementioned stocks, JetBlue currently carries a Zacks Rank #5 (Strong Sell), while the other three carry a Zacks Rank #3 (Hold), presently. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, oil prices have stopped moving northward over the past month and have in fact declined 8.5% in November so far. Factors like an increase in supply, record U.S. oil production and dispute among the OPEC+ group of exporters regarding agreement on any additional production cuts have contributed to the reduction in oil prices.
This southward movement in oil prices is a welcome development for airline stocks. This is reflected in the fact that the Zacks Airline industry has appreciated 17.7% in a month’s time, well above the S&P 500’s 9.4% rise in the same time period.
Record Thanksgiving Traffic: Another Positive
Coupled with the southward oil price movement, the buoyant passenger volumes witnessed during the ongoing Thanksgiving travel period are another positive for airlines that have led to the price surge.
A mind-boggling 30 million passengers are expected to be screened between Nov 17 and Nov 28, a record high, per the Transportation Security Administration. The decline in airfares supports the upbeat traffic projection.
Delta expects 6.2-6.4 million passengers to avail its flights in the Nov 17-28 timeframe. The forecast implies that 515,000-530,000 passengers are likely to fly per day. UAL expects to have recorded its busiest-ever Thanksgiving, with nearly 6 million people flying with the airline during the holiday travel period. American Airlines, too, has been attracting huge traffic during the ongoing Thanksgiving holiday season.
The record traffic during the Thanksgiving period, in addition to the decline in fuel costs, has provided the much-needed boost to airline stocks after a tough few months due to headwinds like high labor and fuel costs and a slowdown in domestic air travel demand.
Why Haven’t You Looked at Zacks' Top Stocks?
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.
See Stocks Free >>
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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.