We recently issued an updated report on Gol Linhas Aéreas Inteligentes S.A. (GOL - Free Report) .
With easing travel restrictions, Gol Linhas is seeing modest uptick in passenger demand particularly on the domestic front. Notably, the company saw a 20% improvement in demand in August compared with July levels. The carrier’s gross sales surged 27% to R$523 million in August from July. Additionally, gross revenues jumped 15% in August from July. Anticipating the uptrend in travel demand to continue, the carrier expects capacity to be at 80% of the 2019 level (domestic).
Moreover, low fuel prices are aiding Gol Linhas amid adversities. Average fuel price per liter decreased 3.5% year over year in the first six months of 2020. Additionally, the airline’s stringent cost-cutting measures support the bottom line.
Despite the recent improvement, demand is significantly lagging the year-ago levels as the pandemic continues. Evidently, the carrier’s passenger revenues declined approximately 47% year over year in the first half of 2020 due to slump in air travel demand following the coronavirus pandemic.
Zacks Rank & Stocks to Consider
Gol Linhas currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings (KNX - Free Report) , J.B. Hunt Transport Services, Inc. (JBHT - 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, J.B. Hunt and Werner is pegged at 15%, 15% and 8.5%, respectively.
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