Wall Street’s spotlight is turning to the nationwide ground stop for Alaska Airlines (NYSE:ALK), which the Federal Aviation Administration (FAA) recently lifted. While this was a concerning news item following a major safety issue earlier this year, ALK stock is actually gaining significantly today. Meanwhile, airplane manufacturer Boeing (NYSE:BA) is seeing shares slip during the Wednesday session.
Initially, and without specific explanation, the FAA issued a nationwide ground stop for Alaska Airlines. Notably, the directive excluded SkyWest, a regional airline that services Alaska and other airliners. Alaska later provided the reason for the stop in a statement to USA Today:
“This morning we experienced an issue while performing an upgrade to the system that calculates our weight and balance. A ground stop for all Alaska and Horizon flights was instituted at approximately 7:50am PT. We’re working to resolve the issue as quickly as possible. We apologize for the inconvenience and encourage guests to check the status of their flights on alaskaair.com or the Alaska App prior to heading to the airport.”
According to a post from The Points Guy, “anecdotal reports” pointed to some delays at Seattle-Tacoma International Airport. Alaska Air is based in Seattle, with the aforementioned airport representing its largest hub.
ALK Stock Flies, But Boeing Isn’t So Lucky
While airline passengers have been unnerved by a recent high-profile safety issue involving an Alaska flight, investors have shown little apprehension today. As of this writing, ALK stock is up more than 4%. Since the start of the year, shares are also up almost 12%.
Meanwhile, Boeing hasn’t been so lucky. BA shares lost about 1% today before attempting to pare down the red ink. Indeed, Boeing has taken a major hit in its market capitalization of late, losing more than 30% year-to-date (YTD).
Back in January, a Boeing 737 Max operated by Alaska suffered a blown door-plug panel while inflight. The incident occurred just minutes after takeoff from Portland, Oregon, forcing pilots to make an emergency landing. Subsequently, in March, the Department of Justice launched a criminal investigation into the matter.
Coincidentally, the nationwide ground stop for Alaska Airlines comes amid Senate committees holding dual hearings on Wednesday regarding allegations of “major safety failures” at Boeing. Interestingly, although BA stock still carries a consensus moderate buy rating, Northcoast Research analyst Chris Olin recently downgraded shares to “sell.”
Why It Matters
As if to emphasize the contrast in sentiment, ALK stock enjoys a unanimous strong buy rating on TipRanks based on eight opinions. Admittedly, the average price target of $44.08 represents only modest upside for ALK. However, the most optimistic target is $55 per share.
On the date of publication, Josh Enomoto 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.
