Yesterday, BCA Research's US Equity Strategy service reiterated its overweight stance on the S&P airlines index. Airline stocks have taken it on the chin lately on the back of COVID-19 demand destruction fears, but…
Highlights Portfolio Strategy Most of the macro and operating indicators we track are sending conflicting messages on the anticipated direction in the cyclical/defensive ratio. Stay on the sidelines on cyclicals versus defensives.…
Neutral - Downgrade Alert The transportation industry is a bellwether for the economy as rising freight hauling services demand is synonymous with firming economic activity and vice versa. The recent FedEx earnings report…
Overweight-Downgrade Alert Airline stocks bounced off a critical support level on the back of encouraging profit results (top panel). Lower kerosene prices especially for the non-hedged carriers are flowing straight to the…
When our U.S. Equity Strategy team moved to an overweight recommendation on the S&P airlines index last year, they noted three pillars supporting the onset of an earnings outperformance: a drubbing in oil prices significantly…
Overweight (Downgrade Alert) When we moved to an overweight recommendation on the S&P airlines index in the fall of last year, we noted three pillars supporting the onset of an earnings outperformance: a drubbing in oil prices…
Overweight With a pickup in oil prices in general and jet fuel prices in particular, a logical inference would be a decline in airlines’ earnings power (second panel). However, the revenue side of the equation has…
Overweight The Q4 earnings season has become dramatic in the airlines sector as the S&P airlines index is fairly evenly split with positivity and negativity. On the positive front, both LUV and AAL delivered guidance ahead…
Overweight An axiom we have noted numerous times is that, as oil prices decline, the share prices of airlines rise and vice versa. As such, the recent spike in airlines share prices (our upgrade of the S&P airlines index a…
Given the downward pressure on input costs facing airline profits, our U.S. equity strategists have put airlines on upgrade alert and are cementing their gains of 18% from their underweight position. They have also increased…