Why Are Airline Stocks DAL, AAL, UAL Up Today?

  • Airlines stocks are advancing this morning and trending on social media.
  • American Airlines (AAL) raised its Q3 revenue guidance.
  • However, Bank of America has been bearish on AAL stock.
airline stocks - Why Are Airline Stocks DAL, AAL, UAL Up Today?

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Airline stocks are climbing and trending on social media this morning. They are advancing after American Airlines (NYSE:AAL) increased its third-quarter revenue guidance.

Among the airline stocks that are rising are AAL stock, up 4.8% to $12.63, Delta (NYSE:DAL), which is gaining 3% to $30.26, and United Airlines (NYSE:UAL), which is also adding 3% to $35.17.

American raised its Q3 revenue growth guidance to be up about 13% versus the same period in 2019. Previously, the airline had anticipated that its top line would increase by 10%-12% compared with Q3 of 2019.

The company added that it believes its Q3 total revenue per available seat mile climbed about 25% compared with the same period in 2019. That’s better than its prior guidance of a 20%-24% gain.

Furthermore, American estimates that its Q3 operating margin was about 7%.

 Bank of America Is Bearish on Airline Stocks

In a note to investors on Oct. 6, Bank of America analyst Andrew Diodora kept an “underperform” rating on AAL shares. The analyst wrote that airlines’ bookings are no longer climbing. As a result, he expects American’s Q4 guidance to be similar to its Q3 outlook.

Diodora trimmed his price target on AAL stock to $7 from $8.

Delta’s CEO Sold Shares in August

What else is going on in the world of airline stocks? Well, Delta’s CEO Ed Bastian unloaded $1.5 million, or 47,500 shares, of DAL stock on Aug. 31, InvestorPlace Assistant News Writer Eddie Pan reported on Sept. 8. In the wake of the transactions, the CEO retained nearly 400,000 shares of DAL stock.

The CEO also unloaded more than 27,600 shares of Delta in May.

On a positive note, Pan added that the number of individuals screened by the Transportation Security Administration (TSA) over Labor Day Weekend came in slightly above the number checked during the same weekend of 2019, before the coronavirus pandemic had begun.

On the date of publication, Larry Ramer did not hold (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.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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