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Stocks Rise Following FAA Restart; Domestic Flights Resume
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Markets extended their recent rally on Wednesday morning, as the Federal Aviation Administration (FAA) resumed all domestic flights following a system failure. The temporary grounding sparked widespread flight delays, with U.S. departures halted until 9 a.m. ET. More than 21,000 flights were on the docket today, with at least 4,500 of those encountering either delays or cancellations.
In the early morning hours, the White House announced that President Biden was briefed by the Secretary of Transportation on the massive FAA outage. White House Press Secretary Karine Jean-Pierre posted on social media that “there is no evidence of a cyberattack at this point, but the President has directed the Department of Transportation to conduct a full investigation into the causes.”
The national system that experienced an outage – known as Notice to Air Missions (NOTAM) – is essential to pilots and flight personnel, according to the FAA. Pilots typically use the NOTAM system for up-to-date information on flight hazards and restrictions. The system appears to have been restored after the technical outage, allowing departures to resume.
Apart from the major news, not many people have been talking about airlines from an investment standpoint. But that may be about to change. With travel picking back up and oil trending downward, opportunity may be ripe for this oft-forgotten industry. The U.S. Global Jets ETF (JETS - Free Report) appears to be in the midst of a new rally after testing support from the pandemic 2020 low. JETS provides investors access to the global airline industry, including airline operators and manufacturers.
Image Source: StockCharts
The Zacks Transportation – Airline industry, part of the Transportation sector, is currently ranked in the top 18% out of approximately 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. Digging a bit deeper, this group has widely outperformed the market over the preceding 3 months with a 24.2% return:
Image Source: Zacks Investment Research
Quantitative research studies have shown that approximately half of a stock’s price movement can be attributed to its industry group. By focusing on top stocks within leading industries, we can dramatically improve our odds of success. Also note the favorable characteristics for this group below:
Image Source: Zacks Investment Research
The U.S. Global Jets ETF includes holdings that many investors are likely familiar with, including Zacks Rank #2 (Buy) stock United Airlines (UAL - Free Report) . UAL makes up nearly 11% of the total JETS ETF holdings and is the third-largest position. Let’s take a deeper look at this top-rated stock.
United Airlines
United Airlines is a global provider of air transportation services. The company transports people and cargo through its mainline and regional fleets. UAL also offers catering, ground handling, training, and maintenance services. United Airlines was incorporated in 1968 and is headquartered in Chicago, IL.
The major airliner has surpassed earnings estimates in four of the past six quarters. UAL most recently reported Q3 results back in October of $2.81/share, a 27.15% surprise versus the $2.21 consensus estimate. Revenues of $12.88 billion also beat estimates. The company has delivered a trailing four-quarter average earnings surprise of 7.77%.
Analysts covering UAL have increased their earnings estimates across the board. Looking ahead, 2023 estimates have been raised 6.58% over the past 60 days. The Zacks Consensus Estimate now stands at $6.80/share, reflecting stellar growth of 218.02% versus last year.
Image Source: Zacks Investment Research
Make sure to keep an eye on UAL and the rest of the airline industry as the group appears set for a period of outperformance.
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Stocks Rise Following FAA Restart; Domestic Flights Resume
Markets extended their recent rally on Wednesday morning, as the Federal Aviation Administration (FAA) resumed all domestic flights following a system failure. The temporary grounding sparked widespread flight delays, with U.S. departures halted until 9 a.m. ET. More than 21,000 flights were on the docket today, with at least 4,500 of those encountering either delays or cancellations.
In the early morning hours, the White House announced that President Biden was briefed by the Secretary of Transportation on the massive FAA outage. White House Press Secretary Karine Jean-Pierre posted on social media that “there is no evidence of a cyberattack at this point, but the President has directed the Department of Transportation to conduct a full investigation into the causes.”
The national system that experienced an outage – known as Notice to Air Missions (NOTAM) – is essential to pilots and flight personnel, according to the FAA. Pilots typically use the NOTAM system for up-to-date information on flight hazards and restrictions. The system appears to have been restored after the technical outage, allowing departures to resume.
Apart from the major news, not many people have been talking about airlines from an investment standpoint. But that may be about to change. With travel picking back up and oil trending downward, opportunity may be ripe for this oft-forgotten industry. The U.S. Global Jets ETF (JETS - Free Report) appears to be in the midst of a new rally after testing support from the pandemic 2020 low. JETS provides investors access to the global airline industry, including airline operators and manufacturers.
Image Source: StockCharts
The Zacks Transportation – Airline industry, part of the Transportation sector, is currently ranked in the top 18% out of approximately 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months. Digging a bit deeper, this group has widely outperformed the market over the preceding 3 months with a 24.2% return:
Image Source: Zacks Investment Research
Quantitative research studies have shown that approximately half of a stock’s price movement can be attributed to its industry group. By focusing on top stocks within leading industries, we can dramatically improve our odds of success. Also note the favorable characteristics for this group below:
Image Source: Zacks Investment Research
The U.S. Global Jets ETF includes holdings that many investors are likely familiar with, including Zacks Rank #2 (Buy) stock United Airlines (UAL - Free Report) . UAL makes up nearly 11% of the total JETS ETF holdings and is the third-largest position. Let’s take a deeper look at this top-rated stock.
United Airlines
United Airlines is a global provider of air transportation services. The company transports people and cargo through its mainline and regional fleets. UAL also offers catering, ground handling, training, and maintenance services. United Airlines was incorporated in 1968 and is headquartered in Chicago, IL.
The major airliner has surpassed earnings estimates in four of the past six quarters. UAL most recently reported Q3 results back in October of $2.81/share, a 27.15% surprise versus the $2.21 consensus estimate. Revenues of $12.88 billion also beat estimates. The company has delivered a trailing four-quarter average earnings surprise of 7.77%.
Analysts covering UAL have increased their earnings estimates across the board. Looking ahead, 2023 estimates have been raised 6.58% over the past 60 days. The Zacks Consensus Estimate now stands at $6.80/share, reflecting stellar growth of 218.02% versus last year.
Image Source: Zacks Investment Research
Make sure to keep an eye on UAL and the rest of the airline industry as the group appears set for a period of outperformance.