More U.S. airlines are warning about the impact of the coronavirus delta variant on travel demand. But President Biden on Thursday announced expansive new vaccination requirements. So are any airline stocks buys right now?
Biden on Thursday announced measures requiring vaccinations for all federal executive-branch workers and contractors that work with the U.S. government. More than 17 million health care workers at facilities that receive Medicare or Medicaid reimbursement will also need to get shots. Businesses with more than 100 employees will need to ensure those workers are vaccinated or tested weekly.
Biden is also asking big entertainment venues to require proof of vaccination or a negative test result.
Second-quarter results for the four major U.S. airlines 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.
Coronavirus cases surged over this summer, led by states with low vaccination rates. New cases have fallen in recent days.
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.
Delta Stock Chart
The stock’s relative strength line has flattened out the past few days, after moving lower much of the year.
American Airlines Stock Chart
American Airlines stock is not in a base. But it has retaken support at its 50-day line.
Similar to Delta and the other airline stocks, American Airlines (AAL) has a weak 33 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 10 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 20 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 line.
JetBlue stock is not in a base, according to Marketsmith.
Shares have a Composite Rating of 12, 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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