U.S. equities are continuing their uneasy stasis on Tuesday, keeping the Dow Jones Industrial Average locked near the 21,000 level in one of the tightest trading ranges in decades.
But there is excitement if you know where to look.
On Monday, it was all about the massive surge in Apple Inc. (NASDAQ:AAPL) pushing its market capitalization past the $800 billion mark for the first time ever.
Today, the major airline stocks are bursting higher thanks to solid traffic updates that has whipped investors into a frenzy.
Shares in the industry group have been in a six-month holding pattern, on concerns over excess capacity and a series of embarrassing PR disasters. That’s all changing now in what looks like the start of a powerful upside breakout.
Here are three airline stocks on the move, and where they might be headed:
Airline Stocks Pushing Higher: United Airlines (UAL)
United Continental Holdings Inc (NYSE:UAL), which weathered fallout from the violent removal of 69-year-old doctor David Dao from an overbooked flight and the freezing of a passenger’s pet rabbit, is enjoying a push to new highs as shares rise 5.3% in trading on Tuesday.
This was driven by the April traffic update from management, with a 7.4% year-over-year increase in revenue per mile and a 4% increase in average seat mile. Second-quarter passenger unit revenue guidance of 1% to 3% was maintained.
Traders should watch for a push in UAL shares to $85 — mirroring the width of the stock’s recent trading range — for a gain of 8% from here.
United will next report results on July 19 after the close. Analysts are looking for earnings of $2.22 per share on revenues of $9.87 billion.
Airline Stocks Pushing Higher: Delta Air Lines (DAL)
Delta Air Lines, Inc. (NYSE:DAL) shares are up 2.6% in Tuesday’s trade, pushing further above their 50-day and 200-day moving averages. The stock is now closing in on December-March highs near $52.
Bloomberg reported earlier this week that the company is considering a delay to its $3 billion Airbus order.
Delta reported mixed results on April 12, with earnings of 77 cents per share beating the 73 cents analysts are expecting. Revenues missed slightly. However, a recent pullback in fuel prices should boost profitability in the current quarter. A return to its prior highs would be worth a 4% gain from here — and that looks like the very bottom of its potential upside.
Delta will next report results on July 13 before the bell. Analysts are looking for earnings of $1.58 per share on revenues of $10.7 billion.
Airline Stocks Pushing Higher: American Airlines (AAL)
American Airlines Group Inc (NASDAQ:AAL) shares are challenging their late April high and look ready for an attempt at the December/January highs near $50.
American raised its second-quarter revenue per average seat mile estimate to 3.5% to 5.5% (up 0.5% overall) thanks to improving fight yields and lower forecast fuel prices. In late April, the company signed a $182 million deal for regional jets from Brazilian maker Embraer.
Merely a return to prior highs would be worth a 6%-plus gain from here.
AAL will next report results on July 21 before the bell. Analysts are looking for earnings of $1.62 per share on revenues of $10.9 billion.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
