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Here's Why You Should Hold AZUL Stock in Your Portfolio Now
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With a growth score of A, Azul S.A. (AZUL - Free Report) has outperformed its industry by rising 51.1% in the past year compared with the industry’s 19.5% growth.
Let’s look at some other factors that make AZUL a stock to be kept intact in portfolios.
Improving air-travel demand bodes well for AZUL and the recently released air-traffic data for May affirms this. The consolidated figure for revenue passenger kilometers, a measure of air traffic, showed an increase of 8.3% compared with the year-ago reported figure.
The company’s various codeshare agreements have helped increase international air traffic by 97.7% compared with the year-ago figure. An increase of 5% in capacity has resulted in the load factor (percentage of seats filled by passengers) being at 79.8% for the reported period.
Recently in May, United Airlines widened the scope of its code-sharing partnership with Brazilian carrier Azul. Under the expanded deal, passengers can fly to six new destinations after connecting from the offered Brazilian airports to Orlando or Fort Lauderdale on UAL flights. The six new destinations are Chicago, Cleveland, Denver, San Francisco, Washington DC and Los Angeles. The customer-friendly move will allow them to travel using a single ticket for both UAL and Azul-operated flights.
Azul's fleet-modernization efforts are commendable. Azul operates most fuel-efficient and environmentally-friendly fleet in Brazil. Next-generation aircraft dominate Azul's fleet. In first-quarter 2023, fuel consumption per available seat kilometers was down 4.4% from the year-ago levels.
Azul exited the first quarter of 2023 with a total passenger operating fleet of 182 aircraft. The average age of fleet was 7.2 years. The contractual fleet size was 194.
AZUL currently carries a Zacks Rank #3 (Hold).
Some Risks
Azul exited first-quarter 2023 with the current ratio (a measure of liquidity) of 0.25, lower than the fourth quarter's reading of 0.32. Decreasing current ratio is alarming. Moreover, a current ratio of less than 1 implies that the company doesn't have enough liquid assets to cover its short-term liabilities.
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently sports a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s 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 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Triton, currently carrying a Zacks Rank #2 (Buy), benefits from its consistent efforts to reward shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. Its current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.
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Here's Why You Should Hold AZUL Stock in Your Portfolio Now
With a growth score of A, Azul S.A. (AZUL - Free Report) has outperformed its industry by rising 51.1% in the past year compared with the industry’s 19.5% growth.
Let’s look at some other factors that make AZUL a stock to be kept intact in portfolios.
Improving air-travel demand bodes well for AZUL and the recently released air-traffic data for May affirms this. The consolidated figure for revenue passenger kilometers, a measure of air traffic, showed an increase of 8.3% compared with the year-ago reported figure.
The company’s various codeshare agreements have helped increase international air traffic by 97.7% compared with the year-ago figure. An increase of 5% in capacity has resulted in the load factor (percentage of seats filled by passengers) being at 79.8% for the reported period.
Recently in May, United Airlines widened the scope of its code-sharing partnership with Brazilian carrier Azul. Under the expanded deal, passengers can fly to six new destinations after connecting from the offered Brazilian airports to Orlando or Fort Lauderdale on UAL flights. The six new destinations are Chicago, Cleveland, Denver, San Francisco, Washington DC and Los Angeles. The customer-friendly move will allow them to travel using a single ticket for both UAL and Azul-operated flights.
Azul's fleet-modernization efforts are commendable. Azul operates most fuel-efficient and environmentally-friendly fleet in Brazil. Next-generation aircraft dominate Azul's fleet. In first-quarter 2023, fuel consumption per available seat kilometers was down 4.4% from the year-ago levels.
Azul exited the first quarter of 2023 with a total passenger operating fleet of 182 aircraft. The average age of fleet was 7.2 years. The contractual fleet size was 194.
AZUL currently carries a Zacks Rank #3 (Hold).
Some Risks
Azul exited first-quarter 2023 with the current ratio (a measure of liquidity) of 0.25, lower than the fourth quarter's reading of 0.32. Decreasing current ratio is alarming. Moreover, a current ratio of less than 1 implies that the company doesn't have enough liquid assets to cover its short-term liabilities.
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently sports a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s 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 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Triton, currently carrying a Zacks Rank #2 (Buy), benefits from its consistent efforts to reward shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. Its current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.