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Strength Seen in Copa Holdings (CPA): Can Its 5.0% Jump Turn into More Strength?

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Copa Holdings (CPA - Free Report) shares ended the last trading session 5% higher at $102.41. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.2% gain over the past four weeks.

Copa Holdings is being aided by the rosy air travel demand scenario. Riding on the buoyant air travel demand scenario, total traffic at CPA increased 7.3% year over year in September. Capacity increased 9.1%, highlighting the rosy scenario with respect to operational expansion. CPA's September load factor (% of seats filled with passengers) was a solid 86.2% reflecting operational efficiency in managing increased capacity while sustaining passenger loads. CPA's strong growth potential and operational efficiency, highlighted by the above numbers, justify the buy rating maintained on the stock by a Morgan Stanley analyst.

This holding company for Panama's national airline is expected to post quarterly earnings of $3.44 per share in its upcoming report, which represents a year-over-year change of -21.6%. Revenues are expected to be $860.14 million, down 0.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Copa Holdings, the consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CPA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Copa Holdings is a member of the Zacks Transportation - Airline industry. One other stock in the same industry, American Airlines (AAL - Free Report) , finished the last trading session 7.2% higher at $12.89. AAL has returned 7.7% over the past month.

American Airlines' consensus EPS estimate for the upcoming report has changed +43.1% over the past month to $0.13. Compared to the company's year-ago EPS, this represents a change of -65.8%. American Airlines currently boasts a Zacks Rank of #2 (Buy).


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