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

Airline Analysts Turn Cautious

Baker reduced estimates and price targets because he expects industry operating margins, which improved close to two points in the first half of the year, to around half a point.

Baker projected year-end share prices of $17.50 for Delta, his top pick, which closed Tuesday at $9.65; $19 for US Airways, which closed at $11.46; $38 for United, which closed at $18.89; $10 for JetBlue (JBLU), which closed at $5.51; $39.50 for Alaska (ALK), which closed at $34.85, and $12.50 for Southwest (LUV - Get Report), which closed at $9.19.

Wolfe Trahan analyst Hunter Keay has a $27 price target for United, and CRT Capital Group analyst Mike Derchin wrote Wednesday that he remains positive on the industry, particularly Delta and United, despite all the concerns. He said the industry generated an estimated $2 billion in second quarter profits despite rising fuel costs.

"Industry fundamentals are continuing to improve yet expectations are very low," Derchin wrote. "Demand is solid. Fares/yields are up. Load factors are at record levels. Ancillary fees are growing. Capacity discipline remains in force."

In the current quarter, Derchin estimatesd Delta PRASM will rise 4%, industry PRASM will rise 2% and United PRASM will be flat.

>To follow the writer on Twitter, go to

>To contact the writer of this article, click here: Ted Reed
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 $42.17 1.20%
LUV $44.01 -1.34%
SAVE $43.82 -0.25%
UAL $46.66 1.86%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs