Why A Major Shareholder Keeps Jettisoning Shares Of This Airline

For the second quarter of 2015, Hawaiian Holdings reported EPS of $0.61, which came in-line with analysts’ expectations. However, the revenue of $571.29 million that the company reported for the quarter missed analysts’ expectations by almost $7 million. In the past few months airline stocks have been hammered on fears that an increase in capacity and the resultant fall in airfares will drive down the margins of airline companies. Even though Hawaiian Holdings’ stock has managed to recover some lost ground since late-January, analysts and experts are still wary of its future trajectory, as can be gauged from their recent calls on the stock. On August 4, analysts at Morgan Stanley reiterated their ‘Underweight’ rating on the stock and reduced their price target on it to $25 from $26. With one of its largest shareholders reducing its stake in the company at a rapid rate and analysts not showing conviction in the company, we believe that the stock of Hawaiian Holdings may be grounded for the time being.

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