According to the June 22 edition of Barron’s, a US financial magazine, the stocks of four of America’s leading airlines could rise anywhere from 15 to 50 percent. Driving the upswing are lowered fuel prices and shrinking competition.
Barron’s looked at the 2015 forecast for earnings before interest, taxes, depreciation and amortization for the four following airline companies: Delta Air Lines, United Continental Holdings, Southwest Airlines, and American Airlines Group. The found the projected growth to be 40 percent, to $29.2 billion. Compare that to Wall Street’s forecast made in June 2014 before oil prices plunged: an EBITDA to rise by 7 percent to $22.7 billion.
The decline in revenue per available seat, and important data point considered closely by investors, is merely a speed bump on the way to improved performance, the report stated.
Last Friday American Airlines closed at $39.97 per share; Southwest at $33.86; Delta closed at $41.35, and United Continental at $52.01 per share.
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