Chicago, IL – July 19, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American Airlines AAL, C.H. Robinson Worldwide CHRW, Kirby KEX and Southwest Airlines Co. LUV.
Here are highlights from Monday’s Analyst Blog:
Is a Beat in Store for American Airlines (AAL) in Q2?
American Airlines is scheduled to report second-quarter 2022 results on Jul 21, before market opens.
The Zacks Consensus Estimate for AAL's second-quarter 2022 earnings has been revised upward by 43.6% in the past 60 days. The company also has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 5.4%.
American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote
Let's see how things are shaping up for American Airlines this earnings season.
Q2 Expectations
The Zacks Consensus Estimate for American Airlines' second-quarter 2022 revenues is pegged at $13.41 billion, indicating 79.3% growth year over year. The top line is likely to have been aided by solid recovery of air-travel demand (post the pandemic-led slump) and improvement in passenger revenues.
These tailwinds have enabled AAL's management to raise second-quarter revenue guidance. The company now projects total revenues to be up approximately 12% from the second-quarter 2019 figure (prior guidance was an increase in the 6-8% range). Total revenue per available seat miles (TRASM) is expected to be up 22.5% from the second-quarter 2019 actuals (earlier guidance was an increase in the 20-22% range).
On the flip side, increase in oil price (up a massive 48% in first-half 2022) continues to bother AAL's bottom line. Oil price is moving northward, primarily because of the Russia-Ukraine war. For the second quarter, the company estimates average fuel cost per gallon to be in the $4-4.05 range (prior guidance: $3.59-$3.64 band). The Zacks Consensus Estimate for average fuel price per gallon (including related taxes) is pegged at $3.73, indicating growth of 95.2% from the year-ago reported figure.
Further, AAL expects its second-quarter cost per available seat miles in the June quarter to be up approximately 12% from the second-quarter 2019 level (earlier guidance was an increase in the 10-11% range).
What Our Model Says
Our proven model predicts an earnings beat for American Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Airlines has an Earnings ESP of +2.33% and a Zacks Rank #3.
Highlights of Q1
American Airlines' first-quarter 2022 loss (excluding 20 cents from non-recurring items) of $2.32 per share compared favorably with the Zacks Consensus Estimate of a loss of $2.43. Quarterly loss per share was also narrower than the year-ago loss of $4.32.
Operating revenues of $8,899 million skyrocketed 122.03% year over year and surpassed the Zacks Consensus Estimate of $8,810.8 million. This massive year-over-year jump reflects improving air-travel demand.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these too have the right combination of elements to beat on their second-quarter 2022 earnings:
C.H. Robinson Worldwide has an Earnings ESP of +4.20% and a Zacks Rank #1. CHRW will release results on Jul 27. You can see the complete list of today's Zacks #1 Rank stocks here.
C.H. Robinson has an expected earnings growth rate of 16.6% for the current year. CHRW delivered a trailing four-quarter earnings surprise of 17.1%, on average.
C.H. Robinson has a long-term earnings growth rate of 9%. Shares of CHRW have gained 8.8% over the past year.
Kirby has an Earnings ESP of +0.70% and a Zacks Rank #2. KEX will release results on Jul 28.
Kirby has an expected earnings growth rate of 282.14% for the current year. KEX delivered a trailing four-quarter earnings surprise of 7.7%, on average.
KEX has a long-term earnings growth rate of 12%.
Southwest Airlines Co. has an Earnings ESP of +4.00% and a Zacks Rank #3. Improved air-travel demand is likely to aid LUV's results. LUV will release results on Jul 28.
Southwest has an expected earnings growth rate of 226.05% for the current year. LUV delivered a trailing four-quarter earnings surprise of 33.5%, on average.
Southwest has a long-term earnings growth rate of 6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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