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Copa Holdings (CPA) Grapples With Cost Woes: Time To Dump?
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We have issued an updated research report on Copa Holdings, S.A. (CPA - Free Report) on Aug 14. Shares of the company have declined 33.9% on a year-to-date basis due to multiple headwinds.
Reasons for Dismal Performance
High fuel costs have been putting pressure on the bottom line for quite some time, with second-quarter 2018 results reflecting the same. During the quarter, average fuel price per gallon improved 32.9% year over year to $2.35 per gallon. In fact, the company anticipates full-year results to be affected by high fuel costs. Effective fuel price per gallon is estimated around $2.30 in 2018 compared with $1.87 in 2017. Increased labor expenses are expected to hurt the bottom line in the third quarter.
Furthermore, the company’s business suffers from Panama-Venezuela political row. Several flights had to be cancelled owing to the dispute. This turmoil was the primary reason for the company’s unimpressive performance in second-quarter 2018. Copa reported lower-than-expected earnings and revenues in the last reported quarter.
Moreover, the currency headwind in Brazil and Argentina has led the company to lower outlook for operating margin in 2018. The metric is currently projected in the range of 14-16%, down from the previous expectation of 17-19%. Additionally, unit revenues are also expected to remain low in 2018.
Bearish Readings & Zacks Rank
The negativity revolving around the stock can be gauged from the Zacks Consensus Estimate being revised 26.2% downward in the last 60 days for current-quarter earnings. Moreover, the company’s Momentum Score of C highlights short-term unattractiveness. The bearish Zacks Rank #5 (Strong Sell) carried by Copa Holdings reflects these headwinds. The unfavorable rank implies that investors will do well to get rid of the stock from their respective portfolios now. Going by the proven model, the Sell-rated stocks (#4 or 5) are likely to underperform the broader market over the next one to three months.
Shares of Atlas Air Worldwide, GATX and SkyWest have gained 5.6%, 15.3% and 7.1% in the last six months, respectively.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Copa Holdings (CPA) Grapples With Cost Woes: Time To Dump?
We have issued an updated research report on Copa Holdings, S.A. (CPA - Free Report) on Aug 14. Shares of the company have declined 33.9% on a year-to-date basis due to multiple headwinds.
Reasons for Dismal Performance
High fuel costs have been putting pressure on the bottom line for quite some time, with second-quarter 2018 results reflecting the same. During the quarter, average fuel price per gallon improved 32.9% year over year to $2.35 per gallon. In fact, the company anticipates full-year results to be affected by high fuel costs. Effective fuel price per gallon is estimated around $2.30 in 2018 compared with $1.87 in 2017. Increased labor expenses are expected to hurt the bottom line in the third quarter.
Furthermore, the company’s business suffers from Panama-Venezuela political row. Several flights had to be cancelled owing to the dispute. This turmoil was the primary reason for the company’s unimpressive performance in second-quarter 2018. Copa reported lower-than-expected earnings and revenues in the last reported quarter.
Moreover, the currency headwind in Brazil and Argentina has led the company to lower outlook for operating margin in 2018. The metric is currently projected in the range of 14-16%, down from the previous expectation of 17-19%. Additionally, unit revenues are also expected to remain low in 2018.
Bearish Readings & Zacks Rank
The negativity revolving around the stock can be gauged from the Zacks Consensus Estimate being revised 26.2% downward in the last 60 days for current-quarter earnings. Moreover, the company’s Momentum Score of C highlights short-term unattractiveness. The bearish Zacks Rank #5 (Strong Sell) carried by Copa Holdings reflects these headwinds. The unfavorable rank implies that investors will do well to get rid of the stock from their respective portfolios now. Going by the proven model, the Sell-rated stocks (#4 or 5) are likely to underperform the broader market over the next one to three months.
Stocks to Consider
A few better-ranked stocks in the broader Transportation Sector are Atlas Air Worldwide Holdings, Inc , GATX Corporation (GATX - Free Report) and SkyWest, Inc (SKYW - Free Report) . While GATX carries a Zacks Rank #2 (Buy), Atlas Air Worldwide and SkyWest sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Atlas Air Worldwide, GATX and SkyWest have gained 5.6%, 15.3% and 7.1% in the last six months, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>