Find The Best Stocks With Perfect Trade Setups In Minutes A Day

Stop wasting time looking for the right stocks.  Free training on how to find perfect stock trades that can move 300-1,500%.  Learn the # 1 key to successful stock investing and how to find success even If the market is crashing, rebounding… or just going sideways. (ad)

Do Not Delay - Click Here Now

 

JPMorgan Just Upgraded These 3 Airline Stocks – Here’s Why

JPMorgan analyst Jaime Baker names three airline stocks that are buys now, and one that investors should avoid.

Airline stocks soared higher today as Treasury Secretary Steven Mnuchin said the White House would begin responding to their applications for government aid as soon as Friday.

Alaska Air (NYSE: ALK) ended Thursday 8.5% higher, American Airlines (NASDAQ: AAL) gained 10.4%, Delta Air Lines (NYSE: DAL) rose 5%, JetBlue (NASDAQ: JBLU) added 5.2%, Southwest Airlines (NYSE: LUV) gained 6.3%, Spirit Airlines (NYSE: SAVE) jumped 12.5%, and United Airlines (NASDAQ: UAL) soared 14.5% higher.

But even as airline stock climb higher, JPMorgan analyst Jaime Baker advised this week that investors should stick with high-quality names like Delta, United, and Alaska Air, and avoid those stocks with vulnerable balance sheets and operations, particularly American and Spirit. 

Baker issued several ratings in the sector in a note this week, downgrading American, Spirit, JetBlue, and Southwest, and upgrading Alaska to Overweight, while keeping Overweight ratings on both Delta and United. 

The analyst wrote in the note that he initially expected industry revenue in 2021 to hover around 2019 levels, but is now forecasting 2021 revenue to come in 25% below 2019 levels as the coronavirus pandemic continues to ground flights.

“We are growing increasingly convinced that industry recovery to 2019 levels of output will be a multiyear affair, resulting in the material shedding of aircraft and head count along the way,” Baker wrote. “Managements here and abroad appear to be targeting much smaller footprints than we first factored into our modeling.”

Baker said there’s value in Delta and United given that they should benefit from corporate travel ramping back up quicker than leisure travel.

Delta, according to Baker, has the highest margins of the big-name carriers heading into the coronavirus crisis, and boasts one of the strongest balance sheets in the industry. Baker also noted that Delta could gain market share from weaker carriers that have had to cut back on schedules and flight capacity.

While United isn’t as profitable, Baker said that it’s a solid choice as the airline is making progress on turnaround efforts and should weather the crisis with enough liquidity.

Baker concluded that, of the major carriers, American looks like the most vulnerable of the bunch. The analyst downgraded the stock from Overweight to Underweight writing, “our view on aggregate bankruptcy risk… has no doubt evolved in recent weeks” as the need for material downsizing has risen. 

“In our opinion, the margin for error for American management to navigate this crisis outside of the courts is growing uncomfortably thin (and dependent on factors outside of management control, i.e. duration of the virus, traffic recovery cadence, further government support) that we really don’t think we’re left with a choice but to downgrade our credit opinion on American as well, to underweight (from our prior neutral on the credit side,” Baker wrote. 

By the way, if you liked this article, you'll LOVE this Meaty free training I just published on the top 3 questions and challenges every investor faces AND how to overcome them. It's titled "10k into $2.4 Million in 18 months" and you can grab it for free here

There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Company’s software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.

FREE TRADING WEBINAR - TRADERSPRO PRESENTS: Starting With Only $10,000 Retire With $2.4 Million? Click Here Now

Join Us Now
X