Back to top

Analyst Blog

We recently reiterated our Neutral recommendation on the Brazilian airline, GOL Linhas Aéreas Inteligentes S.A. (GOL - Analyst Report).

The company is one of the most profitable low-cost airlines in the world and the most profitable airline in South America, having surpassed the mark of 160 million passengers carried in just 10 years of operations.

Gol Linhas’ long-term growth strategy includes cost minimization by mitigating the adverse effects of higher fuel price. Its low-cost differentiated approach and consultancy services for reducing gas emissions are expected to bolster its market position.

In addition, the company is working towards enhancing its fleet efficacy that is expected to boost productivity and occupancy rates in the coming quarters. Also, over time, the company has raised the number of cities served and inaugurated new terminals to ensure better service and convenience for clients. Furthermore, the company focuses on continuous improvement in the ancillary services. These are expected to reinvigorate customer demand and increase sales.

These long-term growth prospects notwithstanding, weak financial results and uncertainties associated with declining customer demand across the company’s domestic as well as international route network, rise in fuel prices and negative impact of foreign currency translation induce our cautious stance.

GOL’s 2Q12 results were weaker than its comparable quarters as loss widened and nearly doubled to settle at R$715 million. Loss per ADR came in at US$1.37. Revenue hike of 17% was more than offset by higher operating expenses.—caused mainly due to devaluation of real against dollar and rise in fuel prices.
Also, fierce competition from other industry players, such as Copa Holdings SA (CPA - Snapshot Report) and LAN Airlines S.A (LFL - Snapshot Report) remain a nagging concern on the stock.

GOL Linhas currently GOL has a Zacks #3 Rank, which translates into a short-term (1-3 months) ‘Hold’ rating.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
INSITE VISI… INSV 0.30 +7.11%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%