We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Air Transport (ATSG) Falls 45% in the Past Year: Here's How
Read MoreHide Full Article
Air Transport Services Group, Inc. (ATSG - Free Report) shares have plunged 45.1% in the past year compared with a fall of 5.9% of the industry it belongs to.
Image Source: Zacks Investment Research
Reasons for the Downside
An increase in expenses on fuel due to the current oil price surge is hurting ATSG's bottom line. Evidently, operating costs increased 24.8% in 2022 with fuel expenses rising 58.7%.
Operating expenses increased in first-quarter 2023 as well. We expect operating costs to increase 8.6% in second-quarter 2023 from second-quarter 2022 actuals.
Air Transport Services reported lower-than-expected earnings per share in the first quarter of 2023. Moreover, management slashed its EPS guidance for 2023. ATSG now expects 2023 earnings per share in the range of $1.55-$1.70 (prior view: $1.85-$2.00).
Management anticipates a 5% reduction in usage of cargo aircraft for 2023, highlighting the weakness pertaining to the air-cargo market. This, in turn, is likely to hurt ATSG's top line.
Unfavorable Estimates Revision
Due to the above headwinds, the Zacks Consensus Estimate for 2023 earnings have plunged 28.2% to $1.68 per share in the past 90 days.
Zacks Rank and Stocks to Consider
ATSG currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which presently sports a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by Copa Holdings' initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022. Management expects revenues to remain strong in 2023 as well. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis.
For second-quarter and full-year 2023, ALGT’s earnings are estimated to rise 328% and 182%, respectively, on a year-over-year basis.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Air Transport (ATSG) Falls 45% in the Past Year: Here's How
Air Transport Services Group, Inc. (ATSG - Free Report) shares have plunged 45.1% in the past year compared with a fall of 5.9% of the industry it belongs to.
Image Source: Zacks Investment Research
Reasons for the Downside
An increase in expenses on fuel due to the current oil price surge is hurting ATSG's bottom line. Evidently, operating costs increased 24.8% in 2022 with fuel expenses rising 58.7%.
Operating expenses increased in first-quarter 2023 as well. We expect operating costs to increase 8.6% in second-quarter 2023 from second-quarter 2022 actuals.
Air Transport Services reported lower-than-expected earnings per share in the first quarter of 2023. Moreover, management slashed its EPS guidance for 2023. ATSG now expects 2023 earnings per share in the range of $1.55-$1.70 (prior view: $1.85-$2.00).
Management anticipates a 5% reduction in usage of cargo aircraft for 2023, highlighting the weakness pertaining to the air-cargo market. This, in turn, is likely to hurt ATSG's top line.
Unfavorable Estimates Revision
Due to the above headwinds, the Zacks Consensus Estimate for 2023 earnings have plunged 28.2% to $1.68 per share in the past 90 days.
Zacks Rank and Stocks to Consider
ATSG currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which presently sports a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by Copa Holdings' initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022. Management expects revenues to remain strong in 2023 as well. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis.
For second-quarter and full-year 2023, ALGT’s earnings are estimated to rise 328% and 182%, respectively, on a year-over-year basis.