This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

United Will Lose Money, so Buy the Stock: Analyst

Airline share performance so far this year has been mixed, with double-digit gains by three legacy carriers and declines by domestically focused carriers Alaska, JetBlue (JBLU) and Southwest.

12 Highest-Rated Consumer Stocks Picked by S&P

US Airways (LCC) leads the sector with a 50% gain, partially due to strong performance and partially to merger chatter. Because a merger with bankrupt AMR (AAMRQ.PK) would likely lead to further capacity declines, Wall Street is increasingly supportive.

Linenberg considers 2011 to have been "a watershed year" for airlines because they prospered despite sub-2% GDP growth and a 40% increase in fuel costs.

"As such, we remain favorably disposed to the names that we believe are most leveraged to an industry that appears to be undergoing a secular change," he wrote, naming Delta, United and US Airways, as well as low-fare, low-cost carrier Spirit (SAVE - Get Report).

Overall, he estimated the industry will report net a net loss of $815 million, $100 million better than a year ago despite higher fuel costs, in what is typically its weakest quarter. Meanwhile, Maxim Group analyst Ray Neidl wrote, in a recent report, that he estimates the industry will have a small first-quarter loss preceding strong full-year results.

9 Stocks That Prove Dividends Make All the Difference

"The U.S. industry is probably in the strongest position that it has been since deregulation due to three key factors which include industry consolidation, cost/capacity discipline, and the development of ancillary revenues from add-on fees," Neidl wrote. "The key remaining challenge for the legacy airlines is improvement of the balance sheets which would enable the market to value the legacy airlines at a higher multiple."

-- Written by Ted Reed in Charlotte

>To contact the writer of this article, click here: Ted Reed

>To follow the writer on Twitter, go to
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
LCC $0.00 0.00%
DAL $41.18 -2.00%
SAVE $39.80 -6.20%
UAL $46.04 -1.70%
AAPL $94.53 0.54%


Chart of I:DJI
DOW 15,935.96 -269.01 -1.66%
S&P 500 1,848.75 -31.30 -1.66%
NASDAQ 4,269.3630 -93.7810 -2.15%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs