Airline Stocks at Crossroads Ahead of Earnings
April 21 2019 - 10:29AM
Dow Jones News
By Akane Otani
Airline shares, which have mostly lagged behind the broader
stock market this year, are set to face their next major test in
the coming days. Southwest Airlines Co., Alaska Air Group Inc. and
American Airlines Group Inc. are all scheduled to report quarterly
results.
The earnings reports will give investors a sense of how much
soaring oil prices, as well as the government shutdown at the start
of the year, impacted airlines' bookings and fare revenue.
Investors will also try to gauge how much airlines will get hit
by flight cancellations caused by the grounding of Boeing Co.'s 737
MAX jetliners. Dow heavyweight Boeing, whose shares have stabilized
since a March selloff, reports earnings Wednesday.
Even if earnings help fuel a rebound in airline stocks, many of
them will remain underperformers within the transportation
industry. Shares of rental car and truck companies, as well as
railroads, have raced past airlines this year.
But with airline stocks looking relatively cheap, analysts say
there is a chance that upside surprises throughout earnings season
could spur a fresh round of buying. A number of airlines carry
price-to-earnings ratios that are well below the S&P 500's P/E
ratio.
Write to Akane Otani at akane.otani@wsj.com
(END) Dow Jones Newswires
April 21, 2019 10:14 ET (14:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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