In this article, we will look at 5 best airline stocks to buy now. If you want to read our detailed analysis of the airline industry which highlights key trends and major players, you can go to 10 Best Airline Stocks To Buy Now.
5. JetBlue Airways Corporation (NASDAQ:JBLU)
Number of Hedge Fund Holders: 29
JetBlue Airways Corporation (NASDAQ:JBLU) is a major American low-cost airline and also the seventh-largest airline in North America by passengers carried. As of December 31, 2021, the company operated a fleet of 63 Airbus A321 aircraft, 8 Airbus A220 aircraft, 21 Airbus A321neo aircraft, 130 Airbus A320 aircraft, and 60 Embraer E190 aircraft. The company operates in over 107 destinations that span over 31 states of the U.S., the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and 24 countries in the Caribbean and Latin America.
As of this April, MKM Partners analyst Conor Cunningham has a Neutral rating and a $13 price target on JetBlue Airways Corporation (NASDAQ:JBLU).
JetBlue Airways Corporation (NASDAQ:JBLU) is making strides to expand its operations and is increasing M&A activity, which is why it is ranked among the 10 best airline stocks to buy now. On June 6, 2022, the company announced an improved offer to acquire Spirit Airlines (NYSE:SAVE), while competing with Frontier Air Group’s (NASDAQ:ULCC) offer. The company is now offering a reverse break-up fee of $350 million, up $150 million from its previous offering. JetBlue Airways Corporation (NASDAQ:JBLU) also proposed a prepayment of $1.50 per share to shareholders of Spirit Airlines (NYSE:SAVE) as part of its deal.
At the close of the first quarter of 2022, 29 hedge funds were long JetBlue Airways Corporation (NASDAQ:JBLU) with stakes worth $270.25 million. This is compared to 34 positions in the prior quarter with stakes of $294.50 million.
In the first quarter of 2022, Two Sigma Advisors upped its Q4 2021 stakes in JetBlue Airways Corporation (NASDAQ:JBLU) by 11%, bringing them to $34.73 million in Q1 2022. Two Sigma Advisors is the most prominent shareholder in the company.
4. Copa Holdings, S.A. (NYSE:CPA)
Number of Hedge Fund Holders: 29
Copa Holdings, S.A. (NYSE:CPA) operates an estimated 204 daily scheduled flights to 69 destinations that span 29 countries in North, Central, and South America, as well as the Caribbean from the Panama City hub. It is one of the best undervalued airline stocks to buy now. As of June 7, Copa Holdings, S.A. (NYSE:CPA) has a forward PE ratio of 14.40 and is trading at $70.53 per share with the company’s market capitalization sitting at $2.91 billion.
On May 11, Copa Holdings, S.A. (NYSE:CPA) posted a market-beating quarter when it announced earnings for the fiscal first quarter of 2022. The company reported earnings per share of $0.70 and exceeded expectations by $0.58. Moreover, the company’s quarterly revenue came in at $571.58 million, up 207.84% year over year, and outperformed revenue estimates by $14.03 million.
Shortly after the company’s earnings release, Barclays analyst Pablo Monsivais double upgraded Copa Holdings, S.A. (NYSE:CPA) to Overweight from Underweight and reiterated a $96 price target on the shares.
Hedge funds are piling into Copa Holdings, S.A. (NYSE:CPA). At the end of the first quarter of 2022, 29 hedge funds were long Copa Holdings, S.A. (NYSE:CPA) with stakes worth $433.92 million. This is compared to 21 positions in the previous quarter with stakes worth $396.01 million. The hedge fund sentiment for the stock is positive.
As of March 31, 2022, Marshall Wace LLP is the leading shareholder in Copa Holdings, S.A. (NYSE:CPA) owning over 1.46 million shares of the company. The fund upped its prior stakes by 27%, bringing them to $122.22 million in Q1 2022.
3. United Airlines Holdings, Inc. (NYSE:UAL)
Number of Hedge Fund Holders: 31
United Airlines Holdings, Inc. (NASDAQ:UAL) provides air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. On April 20, the company announced earnings for the fiscal first quarter of 2022. The company reported a loss per share of $4.24 and missed EPS estimates by $0.02. However, the company’s quarterly revenue came in at $7.57 billion, up 134.90% year over year, missing expectations by $110.28 million.
Regardless of reporting a weak quarter, United Airlines Holdings, Inc. (NASDAQ:UAL) is making efforts in the airline industry which makes it one of the best airline stocks to buy now. This June, the company reportedly allocated $100 million to fund the expansion of a pilot training center in Denver. The company expects to add roughly 2,000 pilots this year.
Analysts are bullish on United Airlines Holdings, Inc. (NASDAQ:UAL). This April, Citi analyst Stephen Trent raised his price target on United Airlines Holdings, Inc. (NASDAQ:UAL) to $71 from $58 and maintained a Buy rating on the shares.
By the end of the first quarter of 2022, 31 hedge funds held stakes in United Airlines Holdings, Inc. (NASDAQ:UAL) worth $510.80 million. This is compared to 35 hedge funds in the prior quarter with stakes worth $431.28 million.
As of March 31, 2022, PAR Capital Management is the top shareholder in United Airlines Holdings, Inc. (NASDAQ:UAL) owning 3.1 million shares of the company. The total stakes of the fund were valued at $143.71 million, which covers 3.43% of its investment portfolio.
2. Southwest Airlines Co. (NYSE:LUV)
Number of Hedge Fund Holders: 45
Southwest Airlines Co. (NYSE:LUV) operates as a passenger airline company and provides air transportation services in the United States and internationally. As of December 31, 2021, the company operates a fleet of 728 Boeing 737 aircraft. Southwest Airlines Co. (NYSE:LUV) is among the airline giants in the United States and one of the world’s largest low-cost carriers, which makes it rank high among the best airline stocks to buy now.
On May 2, Citi analyst Stephen Trent raised his price target on Southwest Airlines Co. (NYSE:LUV) to $53 from $48 and reiterated a Neutral rating on the shares. The analyst noted the company’s solid earnings for the first quarter of 2022 and strong Q2 guidance while telling investors that he sees Southwest Airlines Co. (NYSE:LUV) well-positioned to sustain profitability in 2022 and beyond.
Hedge funds are raising their stakes in Southwest Airlines Co. (NYSE:LUV). Insider Monkey found 45 hedge funds bullish on Southwest Airlines Co. (NYSE:LUV) at the close of Q1 2022. The total value of these funds’ stakes in the company came in at $1.08 billion. This is compared to 38 positions in the previous quarter with stakes worth $682.03 million. The hedge fund sentiment for the stock is positive.
In the first quarter of 2022, PAR Capital Management upped its prior stakes in Southwest Airlines Co. (NYSE:LUV) by 73%. As of March 31, the fund’s stakes in the company are valued at $158.21 million, which covers 3.78% of its 13F portfolio.
1. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 55
Delta Air Lines, Inc. (NYSE:DAL) is a legacy airline operator and one of the largest airlines in the United States, which makes it one of the best airline stocks to buy. The company provides scheduled air transportation for passengers and cargo in the United States and internationally. This June, Goldman Sachs analyst Catherine O’Brien raised her price target on Delta Air Lines, Inc. (NYSE:DAL) to $45 from $44 and reiterated a Neutral rating on the shares. The analyst noted that the company’s revenue guidance is coming in better than expectations and unit revenue for the second quarter of 2022 is expected to grow by 21.5%. O’Brien also raised her second-quarter EPS forecast to $1.85 from $1.65 while she gave her rating.
On April 13, Delta Air Lines, Inc. (NYSE:DAL) posted earnings for the fiscal first quarter of 2022. The company reported a loss per share of $1.23 but beat expectations by $0.04. The company generated revenue of $9.35 billion, up 125.25% year over year, and outperformed Wall Street consensus by $312.45 million. Moreover, the stock appears to be undervalued. As of June 7, Delta Air Lines, Inc. (NYSE:DAL) has surged 2.52% over the past six months and has a forward PE ratio of 13.96. trading at $39 per share with the company’s market capitalization at $24.71 billion.
Hedge funds are bullish on Delta Air Lines, Inc. (NYSE:DAL). At the close of Q1 2022, 55 hedge funds were long Delta Air Lines, Inc. (NYSE:DAL) with stakes worth $1.27 billion. This is compared to 47 positions in the prior quarter with stakes worth $1.14 billion. The hedge fund sentiment for the stock is positive.
Millennium Management is the dominating stakeholder in Delta Air Lines, Inc. (NYSE:DAL) as of the first quarter of 2022. The fund reportedly upped its Q4 2021 stakes in the company by 72%, bringing them to $170.27 million in Q1 2022.
Here is what Miller Value Partners had to say about Delta Air Lines, Inc. (NYSE:DAL) in its “Miller Opportunity Equity” fourth-quarter 2021 investor letter:
“We’ve healed greatly from the worst days of the pandemic, and we expect that to continue going forward. We see the greatest disconnects between current market expectations and 18-months-out fundamentals in names like Delta Airlines (DAL).
Delta is a quality airline with shareholder-friendly management. It was the only one not to issue equity during the pandemic. It was also the only profitable airline in the second half of 2021. It generated positive operating cash flow despite business and international travel weakness. When earnings finally normalize, which the company doesn’t expect until 2024, it should earn more than $7/share. After bouncing significantly off the lows, DAL currently trades at $41.99 or less than 6x those earnings.
We’ve believed for over a decade that the US airlines are better businesses than they’ve historically been. Consolidation led to a more rational industry. These companies shifted from growth at any cost to a return on capital mindset, the importance of which can’t be understated. We previously believed a recession would finally demonstrate the group’s improved resilience.
Unfortunately, a global pandemic did exactly the opposite. Buffett, who bought the airlines after being a critic of their historical capital destruction, sold his airlines early in the pandemic due to the risk. The government offered support to the industry due to their national strategic importance, which we believe offers protection against another worst-case scenario. We still believe Delta is a better business than the market gives it credit for and one whose prospects will be materially different 18 months from now. As patient investors, you can expect us to hold tight.”
You can also take a look at 15 Most Valuable Airline Companies and 10 Best Airline Stocks to Buy Now.
