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3 Airline Stocks to Help a Portfolio Take Off

Zachary Stutler

Airlines have benefitted in recent months from relatively low fuel costs. Now, with the summer travel season in full swing, here are a few airline stocks that could perform well over the next few months and years.

All three airline stocks are a Zacks Rank #2 (Buy).

GOL Linhas Aereas Inteligentes S.A. GOL

GOL is a Brazilian low-cost airline based in Rio de Janeiro. From January through November of 2018, GOL held 33.4% of the domestic passenger share, making it the domestic leader in Brazil. Our Zacks Consensus Estimates call for GOL’s EPS to be $0.67 in fiscal 2019. This represents growth of 578.57% from the $0.14 loss the company posted last year.

Looking further ahead, fiscal 2020 EPS is expected to continue to soar an additional 52.61%, on the back of 13.51% revenue growth above their respective fiscal 2019 estimates. Estimate revisions for fiscal 2019’s EPS have also trended in the right direction with three upward revisions, against zero downward revisions over the past 60 days. The company has seen a similar trend for fiscal 2020. Overall, GOL’s 2019 estimate has increased 17.5%, from $0.57 to $0.67 in the past 90 days. Meanwhile, fiscal 2020 has seen its estimate surge 87%, from $0.55 to $1.03. GOL stock is up 276.5% over the past 12 months, and its expected growth could help fuel the stock higher.

 

 

JetBlue Airways Corp JBLU

The New York-based firm offers 1,000 daily flights and, as of 2018, was the sixth largest US airline by passengers carried. Along with being a Zacks Rank #2 (Buy), JetBlue also currently boasts an overall “A” VGM (Value, Growth, Momentum) grade in our Style Scores system. Over the past five years, JBLU has traded with an average P/E of 10.66, 1.02 higher than the airline industry’s average for the same time period. But, JetBlue currently has a P/E of 9.07, which is below the industry average and could suggest the stock is undervalued, especially since JBLU stock is up 21% in 2019.

JetBlue is also expected to see significant growth over the next couple of years. Our Zacks Consensus Estimates predict fiscal 2019 EPS growth of 25.16%, as well as 6.74% revenue growth. Fiscal 2020 is then expected to bring a further 17.30% earnings growth and 8.60% revenue growth over their respective 2019 numbers.

AZUL SA AZUL

Azul is a Brazilian budget airline based in a suburb of Sao Paulo and was founded by David Neelson, a Brazilian-American who also founded JetBlue. In 2018, Azul grabbed 22.8% of the domestic passenger share, making it the third largest domestic airline in Brazil. Azul is another company that is expected to report solid growth over the next two fiscal years. Our Zacks Consensus Estimates call for 19.25% top line growth to fuel 22.01% earnings growth in fiscal 2019.

Following these expectations is another 21.27% revenue and 61.47% earnings growth in fiscal 2020. Over the past 30 days, Azul’s EPS estimates have seen significant revisions. The fiscal 2019 EPS estimate has been increased by 12%, with the fiscal 2020 estimate up 15.9%. On top of that, Azul has posted a positive earnings surprise in six out of its past seven quarter, with an average surprise of 54% in the trailing four periods. AZUL stock is also up 38.1% YTD and might have more room to climb.

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
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