Airline stocks are priced cheaply relative to carriers’ expected earnings power. This isn’t unusual, in light of the industry’s combination of challenges. But there is no denying the importance of airlines or the growing demand for their services.
As a group, airline stocks in the S&P 500
SPX trade at a forward price/earnings ratio of 9. The forward P/E for the group has ranged from 5.2 to 10.5 over the past three years, with an average valuation of 7.9. These are prices divided by rolling consensus 12-month earnings-per-share estimates among analysts at brokerage and research firms polled by FactSet, weighted by market capitalization.
Two airline stocks are favored by Citi for the short haul, but Delta might be a lower-risk play
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Airline stocks are priced cheaply relative to carriers’ expected earnings power. This isn’t unusual, in light of the industry’s combination of challenges. But there is no denying the importance of airlines or the growing demand for their services.
As a group, airline stocks in the S&P 500
SPX trade at a forward price/earnings ratio of 9. The forward P/E for the group has ranged from 5.2 to 10.5 over the past three years, with an average valuation of 7.9. These are prices divided by rolling consensus 12-month earnings-per-share estimates among analysts at brokerage and research firms polled by FactSet, weighted by market capitalization.
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