Best Airline Stocks To Buy In June

Key Insights

• United Airlines has recently updated its guidance for the second quarter, highlighting strong demand for air travel. 
• Analyst estimates for United Airlines and Delta Air Lines are moving higher, which is bullish for these stocks. 
• Both stocks are trading at an attractive 6 forward P/E. 

The recent moves in the oil markets did not put too much pressure on the shares of airline stocks, which are trading well above March lows on expectations of a strong summer season.

United Airlines Holdings

United Airlines has recently raised its guidance for the second quarter. The company expects that total revenue per available seat mile (TRASM) will increase by 23% – 25% compared to the same period in 2019. The previous guidance called for growth of 17%.

At the same time, United Airlines noted that its average aircraft fuel price per gallon would increase from the previous estimate of $3.43 to $4.02.

As a result, its adjusted operating margin would be near the 10% level, in line with the previous estimate. While high fuel prices hurt profitability, the market is focused on the company’s ability to grow TRASM.

Currently, analysts expect that United Airlines will report earnings of $1.01 per share in the current year and $7.23 per share in the next year, so the stock is trading at an attractive 6 forward P/E.

Delta Air Lines

Analyst estimates for Delta Air Lines have been moving higher in recent weeks. The company is expected to report earnings of $2.85 per share in 2022 and $6.17 per share in 2023, so the stock is trading at 6 forward P/E, in line with United Airlines.

It should be noted that analyst estimates continue to move higher despite the strong bullish trend in the oil markets. At this point, it looks that demand for air travel is strong enough to offset high fuel prices.

However, traders will need to monitor fuel prices closely as an additional upside move could put pressure on analyst estimates and hurt the price of Delta Air Lines stock.

To keep up with the latest earnings updates, visit our earnings calendar.