- FactSet predicts that the earnings of S&P 500 businesses will rise by just 0.8% this year.
- But earnings for these four airlines are anticipated to rise by more than 50%.
- At these prices, are these airline stocks worth purchasing?
Our attention now shifts to some of the biggest winners of this upswing: a chosen quartet of airline companies anticipated to produce earnings growth of more than 50% this year, when major travel industry sectors eventually approach pre-pandemic levels of activity in 2023. The U.S. Global Jets ETF (NYSE:JETS) is among the greatest methods to expose oneself to the sector. The 51 holdings in this ETF’s portfolio include well-known companies from the aviation sector including Delta Air Lines (NYSE:DAL), United Airlines (NASDAQ:UAL), American Airlines (NASDAQ:AAL), Southwest Airlines Company (NYSE:LUV), and Alaska Air (NYSE:ALK). This ETF, which was introduced on April 30, 2015, has a 0.60% cost and, as of August 18, a 2023 yield of +13%. The company’s main holdings include Delta Air Lines, with a 10.93% stake, American Airlines, with 10%, Southwest Airlines, with 10%, and United Airlines, with 9.90%, as well as Hawaiian Holdings (NASDAQ:HA), with 3.49%, and SkyWest (NASDAQ:SKYW), with 3.45%. The ETF allocates a meager 4.2% to small-cap firms, with a bias favoring mid- and large-cap corporations. When it comes to country representation, the United States comes in first, followed by Canada, Japan, Brazil, and France.
A well-known airline with its headquarters in Fort Worth, Texas, American Airlines runs a vast network of local and international flights. Currently, American Airlines has four weekly flights between Dallas and Shanghai (China). Notably, the U.S. government has approved tripling the frequency of flights between the two countries, which will start in January. The company recently announced earnings that exceeded all market forecasts on July 20. Notably, both revenue and earnings per share were higher than expected, with the latter going over expectations by a remarkable +20.4%. Mark October 19 on your calendars for the forthcoming earnings report. Earnings per share are expected to increase by +133.68% to $0.90 per share. Earnings per share are expected to expand significantly, especially in 2023 when they are forecast to rise by 558%, according to market projections. This rise is anticipated to continue, with increases of 3.5% in 2024 and 36.6% in 2025. There are 18 ratings in all, with 3 being buy, 13 being hold, and 2 being sell for the stock.
The world is home to United Airlines, which has its corporate headquarters in Chicago, Illinois. Surprisingly, the renowned worldwide airplane manufacturer The Boeing Company (NYSE:BA) once owned the airline. Its beginnings can be discovered in Boise, Idaho, where it was established in 1926. In terms of revenue and earnings per share, the financial results released on July 19 showed a good performance, outperforming market expectations. Notably, the latter surprised by a noteworthy margin of +23.8%. The future earnings will be announced on October 17th, so make sure to mark that date in your calendar. Earnings per share are anticipated to climb significantly by 101.10%, according to the market. The earnings per share are predicted by the market to rise by 336% in 2023, 7.2% in 2024, and 15.6% in 2025.
As the largest U.S. airline operating transatlantic flights, Delta offers more European and Asian destinations than any other carrier. Notably, it comes in second place among American Airlines’ rival U.S. carriers in Latin America. Delta has been given approval by the American government to increase its flights to China, following in the footsteps of American Airlines. It specifically intends to start 10 weekly flights to Shanghai from its hubs in Seattle and Detroit. In line with market forecasts, Delta released its financial results on July 13. Notably, earnings per share increased significantly by 11.6%. Put October 12 in a circle on your calendar for the upcoming financial figures. According to projections, there would be a significant increase in earnings per share of +53.60%. Earnings per share are expected to increase by +109.2% in 2023, +12.9% in 2024, and +15.2% in 2025.
Alaska Air Group, a holding company for airlines, with its headquarters in SeaTac, Washington. It includes Alaska Airlines, which is its main airline, and Horizon Air, which is a regional airline. Alaska Air Group’s most recent earnings report, which was released on July 25, showed an outstanding +2.5% revenue beat and a +10.9% earnings per share beat over market expectations. Earnings per share are expected to rise significantly, by +22%, in the upcoming quarter. The most recent estimates predict that profits per share will increase by 49% in 2023. The projected growth rate for 2024 is 10.5%, while that for 2025 is forecast to be 14.4%.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.