More U.S. airlines are warning about the impact of the coronavirus delta variant on travel demand. But the FDA this week granted full approval to the Pfizer (PFE) and BioNTech (BNTX) Covid-19 vaccine, potentially helping to push vaccinations higher. So are any airline stocks buys right now?
The four major U.S. airlines last month wrapped up second-quarter earnings season, which got a boost from a rebound in travel. That rebound followed a year that decimated the travel industry, as pandemic lockdowns restricted flights and forced cancellations.
But carriers like American Airlines (AAL), Southwest (LUV), Spirit Airlines (SAVE) and Frontier Airlines (ULCC) more recently noted softened demand trends, which they said were likely due, at least in part, to the rise of the delta variant.
The surge in U.S. coronavirus cases, led by states with low vaccination rates, has prompted a bigger push to get shots into people’s arms. More states and businesses are requiring vaccinations for some workers. The FDA’s approval could clear the way for more such mandates.
Delta Air Lines (DAL) on Wednesday put new requirements in place for unvaccinated workers. Earlier, United Airlines (UAL) said it would require U.S. employees to get vaccinated or face the threat of dismissal.
Some nations have also restricted travel as the delta variant spreads. Airline stocks have given up gains from earlier in the spring.
Below, we take a look at the chart action for the major U.S. airlines.
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Delta Stock Chart
Delta stock is not in a base. Shares of the carrier are trying to rebound above their 50-day line. The stock is still below its 200-day line.
Delta’s EPS Rating is 17 out of a best-possible 99. Its Composite Rating is 23.
The stock’s relative strength line has rebounded over the past few days, after moving lower much of the year.
American Airlines Stock Chart
American Airlines stock is not in a base.
Similar to Delta and the other airline stocks, American Airlines (AAL) has a weak 36 Composite Rating and a 25 EPS Rating.
United Airlines Stock Chart
United Airlines stock is not in a base. The stock trying to find support at its 50-day and 200-day lines.
United Airlines’ (UAL) ratings, as with other airline stocks, are also weak. United has an 18 Composite Rating. Its EPS Rating is 15.
Southwest Stock Chart
Cowen said Southwest stock was the least leveraged airline heading into the pandemic. Shares are not in a base.
Southwest has a 28 Composite Rating and a 19 EPS Rating. The stock is close to regaining support at its 50-day line. But it is below its 200-day lines.
JetBlue stock is not in a base, according to Marketsmith.
Shares have a Composite Rating of 16, with an EPS Rating of 16. JetBlue (JBLU) is still below its 50-day and 200-day lines, but has moved closer to reclaiming both.
Are Airline Stocks Buys Right Now?
IBD ratings for airline stocks are weak. Bottom line: Airline stocks are not buys right now.
Investors eager to play the recovery could step in once those stocks enter buy zones. But IBD advises investors to seek out stocks with better ratings that are closer to their highs.
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