Increased fuel costs had investors worried about airline stocks throughout most of the year, but these concerns have been significantly downgraded thanks to falling oil prices worldwide.
As we move towards 2019, airline stocks are in focus again. Here are some of the most promising stocks for the mid and long-term that could make for good end of year investments.
Spirit Airline (NYSE: SAVE) – A smaller airline that offers low-cost travel with customizable ticket features, Spirit is growing on the stock market and has had a widely successful year. Spirit released a positive financial outlook this month and is expecting to increase total revenue per available seat mile (a measure of efficiency) by 11% in the fourth quarter. This is up from the previous estimate of 6%.
Spirit has withstood pressures this year to achieve growth in the stock market, and its rating has been recently upgraded by top analysts, including JPMorgan. The average price target consensus is well above the current price, making this a stock that should be considered closely by anybody interested in the Transportation/Logistics sector.
United Continental Holdings (NASDAQ: UAL) – United is a mainstay of the airline industry, and its large fleet and strong market presence allow it to compete with large airlines and even smaller players like Spirit. United stock has grown 40.18% year to date, making it one of the highest performing stocks on the NASDAQ. Recent volatility hasn’t had much of an impact on United, and the recent oil price slide means that the company will enjoy reduced operating costs for the foreseeable future.
According to FactSet, most top analysts now rate United with a BUY, injecting some confidence into the market and making it an interesting pick for investors who want an airline stock with a history of strong performance.
Alaska Air Group (NYSE: ALK) – Alaska Air Group hasn’t grown as much as either United or Spirit in 2018, but this actually leaves more room for improvement and makes it a good prospect for investment. The majority of analysts give a BUY rating to this stock, thanks to excellent cost management and strong revenue for the airline. Alaska Group has a leading market presence for flights centered around Seattle and the rest of the West Coast.
Options for Diversification
As always, current trajectory and past performance do not guarantee anything on the stock market. However, resilience during a year of volatility, and a boost from tumbling fuel prices mean that airline stocks are poised to increase their value in the month ahead.
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