These Two Airline Stocks are Best Positioned Going Forward - Raymond James

October 4, 2022 8:38 AM EDT
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Raymond James analyst Savanthi Syth made a series of changes in the firm’s coverage of Airlines ahead of the Q3 earnings season.

As far as the industry outlook is concerned, the analyst notes lower fuel prices, stronger demand, and higher industry pilot costs. On the topic of pilot costs, Syth notes that this has proved to be a greater cost headwind than previously anticipated, which should “roll through most airlines over the next 18-24 months.”

Scythe cut price targets on Allegiant Travel (NASDAQ: ALGT) and Southwest (NYSE: LUV) to $130 and $48 per share from $150 and $51, respectively. On the other hand, the price target for Delta (NYSE: DAL) is raised to $52 per share from $50.

Alongside Delta, the analyst highlights United (NYSE: UAL) as the best-positioned airline stock.

“It appears there is greater demand recovery among large corporates and in the Northeast in particular, which along with gradual reopening of long-haul international markets likely places UAL and DAL in a relatively stronger position in terms of revenue recovery,” Syth said in a client note.

By Senad Karaahmetovic

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