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Azul (AZUL) Stock Gains 8.1% in a Month: More Upside Left?
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Shares of Azul (AZUL - Free Report) have exhibited an uptrend on the bourses over the past month, gaining 8.1% compared with its industry’s 1.3% rise.
Image Source: Zacks Investment Research
Let’s delve into the reasons for this outperformance.
The gradual improvement in air-travel demand in Brazil is a huge positive for Azul. Upbeat air-travel demand is boosting AZUL’s traffic. The carrier’s consolidated traffic for January 2022 rose 19.5% year over year. To match the buoyancy in demand, Azul is expanding its capacity. In January, its capacity increased 12.3% year over year.
With traffic growth outpacing the expansion in capacity, load factor (% of seats filled by passengers) increased 5.1 percentage points to 83.8%. Upbeat traffic in the airline’s domestic markets is leading to the rosy scenario on a consolidated basis. In January, domestic traffic and capacity improved 11.6% and 4.8%, respectively. Improvement in international traffic is also aiding the overall scenario.
Expressing his delight, Azul’s CEO John Rodgerson said, “Once again, we saw improved demand in January, even with the impact of the omicron variant. I am proud of how our Crewmembers came together to take care of each other and our customers. As pandemic figures continue to improve, we look forward to serving and connecting Brazil through our unparalleled network and diversified fleet.”
We expect a bullish air-traffic scenario to have aided Azul’s fourth-quarter 2021 performance. Detailed results will be out on Feb 24. A strong earnings performance is likely to result in further stock price appreciation.
Investors interested in the Zacks Transportation sector may also consider Atlas Air Worldwide Holdings , Danaos Corporation (DAC - Free Report) and GATX Corporation (GATX - Free Report) , each sporting a Zacks Rank #1 at present.
Atlas Air Worldwide Holdings is the parent company of Atlas Air and Polar Air Cargo, which together operate a fleet of freighter aircraft. AAWW is primarily involved in the airport-to-airport air transportation of heavy freight. AAWW is being supported by strong demand for air freight amid the coronavirus pandemic. The boom in e-commerce trends amid the current scenario is a catalyst.
Over the past 60 days, Atlas Air has seen the Zacks Consensus Estimate for 2022 earnings being revised 8.1% upward. The AAWW stock has appreciated 36.1% in a year’s time.
Danaos is being aided by the bullishness surrounding the containership market. The gradual resumption of economic activities also bodes well for Danaos.
Over the past 60 days, Danaos has seen the Zacks Consensus Estimate for 2022 earnings being revised 40.5% upward. Shares of DAC have appreciated more than 100% in a year’s time.
Based in Chicago, IL, GATX is a global railcar lessor with owned fleets in North America, Europe and Asia. Continued recovery in the North American railcar leasing market is expected to drive its growth in 2022. Improved market lease rates and higher asset disposition gains are anticipated to boost profits at the Rail North America segment, which contribute to the bulk of the top line.
Shares of GATX have gained 3% in a year. The Zacks Consensus Estimate for GATX’s 2022 earnings has been revised 5.9% upward in the past 60 days.
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Azul (AZUL) Stock Gains 8.1% in a Month: More Upside Left?
Shares of Azul (AZUL - Free Report) have exhibited an uptrend on the bourses over the past month, gaining 8.1% compared with its industry’s 1.3% rise.
Let’s delve into the reasons for this outperformance.
The gradual improvement in air-travel demand in Brazil is a huge positive for Azul. Upbeat air-travel demand is boosting AZUL’s traffic. The carrier’s consolidated traffic for January 2022 rose 19.5% year over year. To match the buoyancy in demand, Azul is expanding its capacity. In January, its capacity increased 12.3% year over year.
With traffic growth outpacing the expansion in capacity, load factor (% of seats filled by passengers) increased 5.1 percentage points to 83.8%. Upbeat traffic in the airline’s domestic markets is leading to the rosy scenario on a consolidated basis. In January, domestic traffic and capacity improved 11.6% and 4.8%, respectively. Improvement in international traffic is also aiding the overall scenario.
Expressing his delight, Azul’s CEO John Rodgerson said, “Once again, we saw improved demand in January, even with the impact of the omicron variant. I am proud of how our Crewmembers came together to take care of each other and our customers. As pandemic figures continue to improve, we look forward to serving and connecting Brazil through our unparalleled network and diversified fleet.”
We expect a bullish air-traffic scenario to have aided Azul’s fourth-quarter 2021 performance. Detailed results will be out on Feb 24. A strong earnings performance is likely to result in further stock price appreciation.
Moreover, Azul’s Momentum Score of B highlights the stock’s short-term attractiveness. Azul currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector may also consider Atlas Air Worldwide Holdings , Danaos Corporation (DAC - Free Report) and GATX Corporation (GATX - Free Report) , each sporting a Zacks Rank #1 at present.
Atlas Air Worldwide Holdings is the parent company of Atlas Air and Polar Air Cargo, which together operate a fleet of freighter aircraft. AAWW is primarily involved in the airport-to-airport air transportation of heavy freight. AAWW is being supported by strong demand for air freight amid the coronavirus pandemic. The boom in e-commerce trends amid the current scenario is a catalyst.
Over the past 60 days, Atlas Air has seen the Zacks Consensus Estimate for 2022 earnings being revised 8.1% upward. The AAWW stock has appreciated 36.1% in a year’s time.
Danaos is being aided by the bullishness surrounding the containership market. The gradual resumption of economic activities also bodes well for Danaos.
Over the past 60 days, Danaos has seen the Zacks Consensus Estimate for 2022 earnings being revised 40.5% upward. Shares of DAC have appreciated more than 100% in a year’s time.
Based in Chicago, IL, GATX is a global railcar lessor with owned fleets in North America, Europe and Asia. Continued recovery in the North American railcar leasing market is expected to drive its growth in 2022. Improved market lease rates and higher asset disposition gains are anticipated to boost profits at the Rail North America segment, which contribute to the bulk of the top line.
Shares of GATX have gained 3% in a year. The Zacks Consensus Estimate for GATX’s 2022 earnings has been revised 5.9% upward in the past 60 days.