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3 Airline Stocks To Buy, According To Seaport Global

Seaport Global initiated coverage of seven airliners, three of which should be bought by investors.

Daniel McKenzie initiated coverage of the following airliners:

  • Alaska Air Group, Inc. (NYSE: ALK) at Buy, $53 price target.
  • Allegiant Travel Company (NASDAQ: ALGT) at Buy, $166 price target.
  • Azul SA (NYSE: AZUL) at Neutral, no price target.
  • Copa Holdings, S.A. (NYSE: CPA) at Neutral, no price target.
  • Delta Air Lines, Inc. (NYSE: DAL) at Buy, $43 price target.
  • Gol Linhas Aereas Inteligentes SA (NYSE: GOL) at Neutral, no price target.
  • Hawaiian Holdings, Inc. (NASDAQ: HA) at Neutral, no price target.

Airliners will be in a position to start their “balance sheet repair” initiatives but a more material recovery hinges on the success of a coronavirus vaccine, the analyst wrote.

Bullish Ratings

Beyond 2021, the company can leverage its new alliance with OneWorld, share gains at key hubs, and a new basic economy product to show a strong financial recovery.

Delta controls a 70% or greater market share at four of its five hubs and this gives it a structural revenue advantage over its peers, the analyst wrote. The company ended the second quarter with around $16 billion in liquidity and this implies it’s in “better shape” versus current investor sentiment.

Neutral Ratings

But investors should hold a cautious stance ahead of a potential capital raise that would be costly and create equity dilution.

In the meantime, signs of a more visible demand recovery in the region are needed before turning bullish on Copa.

The company faces near-term concerns, including reports of a capital raise and a sigma of operating in a “bad neighborhood.”

Mounting Debt To Shackle Airlines’ Pandemic Recovery” data-reactid=”50″>Mounting Debt To Shackle Airlines’ Pandemic Recovery

Airlines Highlight Hygiene Efforts To Win Back Customers” data-reactid=”51″>Airlines Highlight Hygiene Efforts To Win Back Customers

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