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Gol Linhas Stock Plummets 75.2% in 3 Months: Here's Why
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Shares of Latin American carrier Gol Linhas have shed 75.2% of value compared with the industry’s 53.1% decline in the past three months.
Plagued by similar predicament as most of its peers, Gol has been badly hit by deflated air-travel demand due to the coronavirus outbreak, which marred its prospects in the process.
Coronavirus-Triggered Havoc Hinders Gol’s Growth
Due to coronavirus-induced feeble demand, Gol slashed its domestic capacity by 92% through May 3. Thanks to low passenger revenues, the carrier's passenger unit revenues dipped 1% in first-quarter 2020. Total demand or traffic is estimated to have dropped 7% in the same period while total capacity, measured in available seat kilometers, is expected to have slid 4%. Total capacity (seats) is predicted to have been down 3% from the year-ago level.
With uncertainty looming over the extent and duration of this global health distress, Gol suspended its 2020 and 2021 guidance until things return to normalcy. Gol’s Latin American counterparts Azul (AZUL - Free Report) and LATAM Airlines also trimmed capacity to match the extremely low-demand scenario. Moreover, Copa Holdings (CPA - Free Report) temporarily terminated all passenger operations.
Coming back to Gol, in a bid to curb costs for aiding its bottom line in such challenging times, the carrier undertook certain measures to control costs like reduction in payroll through unpaid leave, unpaid vacation, suspension of profit-sharing payments, tax deferrals and salary cuts.
Negative Estimate Revisions and Lackluster Momentum Score
The pessimism revolving around the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised 28.7% downward in the past 60 days to $1.54.
The company’s Momentum Score of C further highlights its short-term unattractiveness.
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
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Gol Linhas Stock Plummets 75.2% in 3 Months: Here's Why
Shares of Latin American carrier Gol Linhas have shed 75.2% of value compared with the industry’s 53.1% decline in the past three months.
Plagued by similar predicament as most of its peers, Gol has been badly hit by deflated air-travel demand due to the coronavirus outbreak, which marred its prospects in the process.
Coronavirus-Triggered Havoc Hinders Gol’s Growth
Due to coronavirus-induced feeble demand, Gol slashed its domestic capacity by 92% through May 3. Thanks to low passenger revenues, the carrier's passenger unit revenues dipped 1% in first-quarter 2020. Total demand or traffic is estimated to have dropped 7% in the same period while total capacity, measured in available seat kilometers, is expected to have slid 4%. Total capacity (seats) is predicted to have been down 3% from the year-ago level.
With uncertainty looming over the extent and duration of this global health distress, Gol suspended its 2020 and 2021 guidance until things return to normalcy. Gol’s Latin American counterparts Azul (AZUL - Free Report) and LATAM Airlines also trimmed capacity to match the extremely low-demand scenario. Moreover, Copa Holdings (CPA - Free Report) temporarily terminated all passenger operations.
Coming back to Gol, in a bid to curb costs for aiding its bottom line in such challenging times, the carrier undertook certain measures to control costs like reduction in payroll through unpaid leave, unpaid vacation, suspension of profit-sharing payments, tax deferrals and salary cuts.
Negative Estimate Revisions and Lackluster Momentum Score
The pessimism revolving around the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised 28.7% downward in the past 60 days to $1.54.
The company’s Momentum Score of C further highlights its short-term unattractiveness.
Additionally, Gol carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
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