Best Airline Stocks To Buy Now

Key Insights

• The recent pullback in the oil market provides support to airline stocks ahead of the earnings season. 
• The upcoming report from Delta Air Lines will determine investors’ mood for the next few weeks. 
• The key question is whether pent-up demand is strong enough to offset the impact of rising costs. 

WTI oil has recently moved below the $100 level amid concerns over coronavirus lockdowns in China. This move provided some support to airline stocks, which have been under pressure for many months due to rising costs. Let’s take a look at several airline stocks at the start of the first-quarter earnings season.

Delta Air Lines

Delta Air Lines will release its earnings report on April 13, and its stock will likely be active ahead of the earnings report. The company is expected to report a loss of $1.26 per share, but the market will likely stay focused on the comments about the company’s future performance.

Pent-up demand should serve as the bullish catalyst for Delta Air Lines and other stocks in the industry, but it is not clear whether it will be able to offset the negative impact from rising costs. The upcoming report should provide more information on this issue.

Southwest Airlines

Southwest Airlines is another leading airlines stock that could benefit from the recent pullback in the oil market. The stock is down by just 4% year-to-date, which indicates that many investors remain ready to bet on the stock despite the recent developments in the oil market.

Most likely, investors and traders would prefer to bet on bigger companies in the current market environment, which should benefit Southwest Airlines.

The recent action in Jetblue Airways shares highlights this thesis. Jetblue announced that it would buy Spirit Airlines and was immediately punished by the market, which believed that positions of bigger airlines would remain strong in any case and that Jetblue would have been better off concentrating on its existing business.

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