The four major U.S. airlines — Delta Air Lines (DAL), American Airlines (AAL), United Airlines (UAL) and Southwest (LUV) — all reported fourth-quarter results that beat estimates. Does that make airline stocks a good buy now?
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Beyond the quarterly results, the commentary from each carrier was a bit more mixed. Southwest held to its October sales forecast despite a wave of flight cancellations. But it said it had “reined in” its flight-capacity plans “to adjust to the current staffing environment.” Delta warned that rising fuel costs could lead to a “modest” fourth-quarter loss. United said it expected “record levels” of flying to locations abroad next summer.
Those trends would follow an uneven year for the airline industry and airline stocks. Even as travel demand recovers from this summer’s coronavirus delta variant, airlines have had to train pilots and hire staff to meet rising demand, after many took voluntary departures amid the pandemic.
Some airline stocks are in long consolidations. Below, we take a look at the chart action for the major U.S. airline stocks.
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Delta Stock Chart
Delta stock is in a consolidation. Shares of the carrier are below their 50-day line, after taking a hit following the airline’s third-quarter results.
Delta’s EPS Rating is 57 out of a best-possible 99. Its Composite Rating is 44.
The stock’s relative strength line has fallen.
American Airlines Stock Chart
American Airlines stock is in a consolidation. It is below its 200-day line as well as its 50-day line.
Similar to Delta and the other airline stocks, American Airlines has a not-great 43 Composite Rating and a 48 EPS Rating.
United Airlines Stock Chart
United Airlines stock is testing support at its 50-day line. But it is below its 200-day line.
United Airlines’ ratings, as with other airline stocks, are also weak. United has a 41 Composite Rating. Its EPS Rating is 47.
Southwest Stock Chart
Cowen said Southwest stock was the least leveraged airline heading into the pandemic. Shares were in a consolidation.
Southwest has a 33 Composite Rating and a 49 EPS Rating. The stock is below its 50-day and 200-day lines.
JetBlue Stock
JetBlue stock is not in a base, according to MarketSmith.
Shares have a Composite Rating of 12, with an EPS Rating of 17. JetBlue (JBLU) has lost support at its 50-day line. It is below its 200-day line.
Are Airline Stocks Buys Right Now?
IBD ratings for the airlines are weak, even as some consolidate. Bottom line: Airline stocks are not buys right now.
Investors eager to play the recovery could step in once those stocks enter buy zones. But IBD advises investors to seek out stocks with better ratings that are closer to their highs.
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