Today, the entire airline sector is seeing impressive interest from investors. Airline stocks, which have generally been handed a beating over the past month, have rebounded sharply today. At the time of writing, shares of Delta (NYSE:DAL), United (NASDAQ:UAL), American (NASDAQ:AAL) and Southwest (NYSE:LUV) are all up between 5% and 11%.
Those are some impressive moves.
Driving airlines higher today is the start of earnings season. American Airlines was among the first, sharing its preliminary results on Tuesday. The company said its revenue for Q2 would exceed pre-pandemic levels.
Investors also really seem to like the reiteration of rather strong targets for next quarter. Demand remains strong, and it appears that the existing order flow for these major airline stocks could offset cancellations, which have provided uncertainty for investors of late.
Let’s dive into what investors may want to watch, as the rest of the airline peer group is set to report shortly.
American Lifts Airline Stocks
Notably, American Airline’s impressive 11% move higher today has outpaced its peers. That’s partly because investors know what they’re getting with this airline. Its peers have yet to report.
However, should the other major airlines follow suit, these are some big numbers. American is expecting revenue to come in at $13.4 billion, up 12% from the same quarter in 2019. Questions about margins and other metrics including available seat miles have plagued investors for some time. With more certainty could come a willingness to invest in this sector. At least, that’s what investors are hopeful about today.
The reiteration of forward guidance from American signals that this airline is up to the task of meeting inflation. In essence, American has been able to successfully pass costs onto consumers. And with the economy still near full employment, there is some hope that this trend can continue forward.
From here, I think airline stocks are likely to remain volatile. That said, today’s move is encouraging for investors and traders. Keep American and its peers on your radar.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
