Shares of Gol Linhas Aereas Inteligentes GOL have skyrocketed 160.8% over the past three months, comprehensively outperforming the industry’s 49.6% growth.
Let’s delve deeper to unearth the reasons for this astounding price performance in these coronavirus-ravaged times.
The gradual improvement in air-travel demand following the relaxation of travel restrictions bodes well for Gol Linhas. Just like the United States, parts of South America are beginning to reopen after weeks of coronavirus-induced lockdown.
Notably, Gol Linhas’ May ticket sales surged from April by more than 100% on all its platforms. Moreover, increasing capacity in the last week of May helped the carrier generate 22% higher passenger revenues from that in April.
Gol Linhas’ improved liquidity position owing to cost-cutting is also a positive. As of May 31, 2020, the company had R$3.5 billion in total liquidity, indicating more than 12 months of cash on hand (excluding refunds and restricted cash).
As of April, this presently Zacks Rank #2 (Buy) stock had more than 10 months of cash on hand. Moreover, the fact that Gol Linhas, which competes with the likes of the currently Zacks Ranke #4 (Sell) Copa Holdings CPA in the Latin American aviation space, reduced its cash-burn rate is also encouraging.
Estimate Revision & Style Score
Echoing this positive sentiment, the Zacks Consensus Estimate for the current year is pegged at a loss of 75 cents per share, indicating a marked improvement from its reading of a loss of $1.34, 60 days ago. Moreover, Gol Linhas has an attractive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum.
Other Key Picks
Investors interested in the Zacks Transportation sector may also consider two other top-ranked stocks like Air Lease Corporation AL and Teekay Tankers Ltd. TNK, both carrying the same Zacks Rank as Gol Linhas. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Air Lease's earnings surpassed the Zacks Consensus Estimate in two of the last four quarters (missing estimates in the other two).
Teekay Tankers' bottom line surpassed the Zacks Consensus Estimate in each of the last four quarters.
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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
Air Lease Corporation (AL) : Free Stock Analysis Report
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report
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