TD Cowen Adjusts Airline Earnings Amid Fuel Costs; United, Delta Top Picks

TD Cowen Revises Airline Sector Outlook

TD Cowen has adjusted earnings estimates for major U.S. airlines downward, citing sustained increases in jet fuel prices. Despite these revisions, the firm maintains 'Buy' ratings for its top picks: United Airlines and Delta Air Lines.

Market Situation Overview

Analyst Tom Fitzgerald updated forecasts reflecting current fuel costs. While higher fuel expenses pressure profitability, resilient travel demand—especially strong corporate bookings—and modest yield improvements partially offset the impact.

Key Airline Recommendations

United Airlines (UAL): Remains TD Cowen's top pick, designated 'Buy' with a revised $192 price target. United is lauded for its quality growth story, strength in long-haul international markets, and diversified premium, corporate, and loyalty revenues.

Delta Air Lines (DAL): Ranked second, Delta also maintains a 'Buy' rating with a lowered $105 price target. Its diverse revenue profile, robust loyalty program, and strong balance sheet provide resilience.

Conclusion

Despite rising fuel costs, TD Cowen's analysis suggests airlines with strategic positioning and financial strength, like United and Delta, are well-positioned to navigate current market dynamics.

FAQ

Q: What is the primary reason for TD Cowen's revised airline earnings estimates?

A: Sustained increases in jet fuel prices.

Q: Which airlines are TD Cowen's top picks?

A: United Airlines (UAL) and Delta Air Lines (DAL).

Source: Investing.com