Republic Airways Holdings Inc. (RJET): This Airline Could Fly High

JetBlue has been an underperformer too, up only 11%. Recent buyout talks did not help to lift the stock. David Neeleman, who left the company in 2008 and is currently working on the IPO of his Azul Linhas Aereas, was told to express interest in JetBlue. However, at the same day the rumor was announced, David Neeleman denied the rumor. The stock has been traded flat since then, and the rumor seems to be unfounded.

Bottom Line

Republic Airways Holdings Inc. (NASDAQ:RJET) is an attractive buy. The company is undervalued relative to its peers. The momentum for airline stocks is good, and the macro environment supports this momentum. The main risk is the rise of the oil prices, that showed some movement in recent days. Still, there are no major catalysts for a significant rise in the oil prices, and, hence, the aircraft fuel. By operating in a healthy industry, Republic Airways has more profit to deliver to investors.

SkyWest looks reasonably priced. Analysts suggest a 14.83 target price, a 6% upside from current levels. However, if the general market goes lower as we head into the earnings season, SkyWest could experience downside of the same size as the possible upside. The stock yields 1.14%, which does not make it a dividend play.

I am neutral on JetBlue as well. I think that the company needs more catalysts to grow. The buyout talk proved to be just a rumor. More initiatives on how to grow revenue are much appreciated. Analysts mean target price suggests a 21% upside, but there’s a long way to go to reach it.

The article This Airline Could Fly High originally appeared on Fool.com and is written by Vladimir Zernov.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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