ODFL is scheduled to report third-quarter 2023 earnings on Oct 25. The Zacks Consensus Estimate for earnings has been revised 2.91% upward over the last 60 days. ODFL has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark on the other occasion), the average beat being 3.86%. Old Dominion Freight Line (ODFL Quick QuoteODFL – Free Report) has an Earnings ESP of +0.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Through ETFs, investors get access to a basket of companies with a similar profile – in this case, transportation-related services. ETFs are convenient because they provide instant diversification at a low cost. This added benefit is appealing to all types of investors, especially when picking stocks requires a certain level of investment knowledge. Nevertheless, libertex overview the increase in international travel costs due to higher jet fuel could take a toll on the sector that is still in recovery mode from the COVID-19 triggered slowdown. According to Peter McNally of Third Bridge Global Sector lead for Industrials Materials and Energy, airplane capacity issues could become rampant as travel costs soar due to higher jet fuel costs.

Airline and transportation ETFs can be a gateway to riding any lift in the sector. Although not a traditional transportation ETF, AWAY invests in technology-focused travel and tourism companies that benefit the travel industry. The fund tracks the performance of 30 companies involved in travel booking and reservations and ride-sharing applications, as well as travel advice.

  • LUV carries more domestic passengers in the United States than any other carrier.
  • The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
  • You cannot just use revenue in general because an airline could sell tickets at a discount just to fill seats.
  • However, over the long run, business travel will most likely return to normal levels.
  • This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.

A company’s seat miles is the number of seats available multiplied by the number of flights flown. The idea is to focus on flights that have a substantial customer base on both sides of the route at the expense of flights to places where it has little exposure or brand loyalty to help sell tickets. As part of the process, Alaska is also rolling out a fare system to rival those of Delta and the other large airlines.

Spirit Airlines: The disruptive airline stock

As tourism begins to pick back up this summer, the travel industry is hoping for a strong rebound despite challenges with decades-high inflation and surging fuel prices. The end of COVID restrictions has prompted some investors to consider getting behind airlines, cruise lines and other transportation-related stocks once again. One way to get in on the action is through exchange-traded funds (ETFs). This means airline stocks are a hot corner of the market right now that the U.S. economy has emerged from the Covid-19 pandemic disruptions that caused so much volatility and uncertainty. Transportation Security Administration data from June indicates summer air travel was at its highest levels since 2019, suggesting the airline industry has returned to pre-pandemic levels of health. American Airlines is the industry leader in terms of network size.

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  • The fund, issued by US Global Investors, selects both domestic and international companies with varying degrees of market capitalization.
  • A lot factors come into play while evaluating an airline stock, including daily cash burn rate, debt, earnings before debt interest, taxes, depreciation, amortization and rents paid to lease aircraft.
  • When that happens, Delta will be in a good position to capitalize.

For instance, on June 18th, the EU announced that it would be gradually lifting travel restrictions for people entering their domain, particularly US citizens. According to the CDC, COVID-19 cases are also decreasing in the US, and 65.4% of the adults in the country have already received at least one dose of the vaccination. These facts, coupled with US President Joe Biden’s previous remarks implying ruling out a nationwide lockdown for US citizens give the industry hope that there may be more citizens allowed to travel if all goes well. Delta is generally considered one of the best airline stocks for business travel. In addition to these bonuses and very comfortable flights, Delta has the Skybonus Rewards Program.

When the consumer has excess money in their pocket to spend on travel, and businesses are looking to expand and sales personnel are travelling, airlines will do well. LUV has, for the last several decades, been the gold standard for airline stock investors and a business model that many, including EasyJet and Ryanair have sought to replicate. International airline companies were one of the most affected by the pandemic restrictions on international and domestic movement. Nearly all airline companies suffered material losses in 2020 and on reduced operations have only just started to return to profitability in 2022. Copa Airlines was founded in 1947 as the National Airline of Panama. Today it is a leading Latin American provider of airline passenger and cargo service.

U.S. Global Jets (NYSE: JETS)

Over the next three years, we don’t expect many large freighters to be either produced or converted from passenger service given the cost and lead-times involved. In September, Morgan Stanley analyst Ravi Shanker gave a bullish outlook for the broader airline industry, citing strong chances of life coming back to normal following a vaccine. Shanker said that travel will start getting back to normal in late early 2022. He believes that revenue passenger miles (RPMs) will revive to 2019 levels exiting 2021 and entering 2022. The company reported record high quarterly operating cash flow of over $3 billion and operating revenue growth of more than 51% year-over year. The company is still incurring some losses related to its late 2022 disruptions, but when you look past these one-time charges there is undoubtedly some underlying strength in Southwest’s core business right now.

Airline companies have staged a profit and revenue rebound amid a recovery of travel worldwide in the past year, though the industry’s outlook is clouded by a slowing economy and high jet fuel prices. With unemployment being so low, the tight labour market will mean rising costs for personnel for all airlines into the future and this could hurt future net operating margins and make any investment less successful. UAL, as one of the more debt leveraged operations, is a riskier proposition for the prospective investor but a market capitalisation of less than $13bn.

Southwest Airlines Co (NYSE:LUV)

In a report released in April, the trade body underlined that a surge in virus cases and vaccine delays at the beginning of the year had impacted the airline industry. IATA thus revised 2021 growth forecasts in terms of global revenue passenger kilometers to 26% in 2021 compared to 2020. The following nine airline stocks exhibit strength-based momentum, fair valuations and reasonable debt loads, providing investors with some good options. The COVID-19 pandemic temporarily caused airline revenues and share prices to fall. Vaccines had people traveling again, but the recovery was choppy as new variants disrupted normal travel patterns.

Here’s how to pick the high-flying stocks in an industry that has been famous in the past for its turbulence.

JETS provides diversified exposure to the air travel industry, including aircraft manufacturers, airports, terminal services, and airlines. The market is in a confirmed uptrend and IBD ratings for airline stocks signal strength. Investors eager to add exposure could step up once some airline stocks enter buy zones. IBD advises investors to execute caution review pit bull adding exposure to stocks so close to earnings. The International Air Transport Association (IATA), a Geneva-based trade body, expects that the airline industry will narrow down annual losses to $47 billion in 2021 compared to losses of over $126 billion in 2020. According to IATA, regions with large domestic markets are expected to lead this growth.

Southwest Airlines Co. (NYSE:LUV)

They may sell the first 30 economy tickets at the lowest price, and then the next 30 tickets at the next possible price, and so on. The company on Dec. 3 said it expects significant pressure on ticket revenue per passenger flight segment in the fourth quarter due to continuing decline in travel amid the coronavirus pandemic. The company also expects non-ticket revenue per passenger flight segment to be down modestly in the fourth quarter. Out of the 816 elite hedge funds tracked by Insider Monkey, 24 reported owning stakes in Allegiant as of the end of the third quarter, up from 23 funds a quarter earlier. JETS invests in a wide range of airline companies, including aircraft manufacturers and airport operators. The fund, issued by US Global Investors, selects both domestic and international companies with varying degrees of market capitalization.

RYAAY was able to very successfully navigate the pandemic with only a small addition to its current debt profile relative to its peers. The airlines stock bolted 6.8% following its June 27 outlook updates. Shares topped a 40.30 entry for a cup base on June 13 after a major run-up in late May. The air carrier also raised its second-quarter revenue growth target to 17%-18% from 15%-17%. On April 20, the air carrier narrowly topped Q1 earnings estimates, with EPS of 5 cents, up from a loss of $2.32 a year ago.

A new generation of discounter with ultra-low fares and significant ancillary income. Seen as more vulnerable to a downturn and facing growing pains, but this is a good addition to a long-term portfolio for a risk-tolerant investor. In August 2022, Ryanair boss Michael O’Leary stated that the era of the €10 plane ticket was seemingly over.

Let’s wait and see how things shake out for the airline industry. I’m going with quality when it comes to airlines that will survive the Coronavirus crisis. The Motley windsor broker review Fool owns shares of and recommends Delta Air Lines, Southwest Airlines, and Spirit Airlines. The Motley Fool recommends Alaska Air Group and JetBlue Airways.