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SkyWest (SKYW) Shares Down 34.8% Since March: Here's Why

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SkyWest, Inc. (SKYW - Free Report) shares have shed 34.8% of value since March compared with the industry’s 25.9% decline.

Reasons for Dismal Performance

Like other airlines, SkyWest is reeling under the effects of the coronavirus pandemic. The demand scenario, which started deteriorating in late January, began to worsen in mid-March.

Evidently, total revenues during the first half of 2020 plunged 26.4% year over year. The COVID-19 pandemic caused a significant reduction in the number of scheduled flights, thereby hurting the top line.

Due to the coronavirus led plunge in air travel demand, the carrier reported wider-than-expected loss in each of the two quarters of 2020. With traffic decline outpacing the capacity reduction, passenger load factor (percentage of seats filled by passengers) tanked 23.4 percentage points to 58% during the first half of 2020.

Unfavorable Estimate Revisions

Thanks to disappearing demand and the economic uncertainty ahead, the Zacks Consensus Estimate for current-quarter bottom line has deterioated to a loss of 7 cents from earnings of 40 cents in the past 60 days. Similarly, the Zacks Consensus Estimate for current-year bottom line has moved down to 46 cents from $1.70 per share in the same time frame.

Zacks Rank & Stocks to Consider

SkyWest currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings (KNX - Free Report) , United Parcel Service, Inc. (UPS - Free Report) and Werner Enterprises (WERN - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, UPS and Werner is pegged at 15%, 7.9% and 8.5%, respectively.

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