Coronavirus Makes Airline Stocks A Screaming Buy: 5 Picks
Zacks Investment Research | Mar 11, 2020 10:02PM ET
The impact of the coronavirus woes may have loomed large on the U.S. airlines industry for the past few weeks and still continues unabated but the industry is well-equipped to overcome such setbacks. In fact, steps have already been taken to contain the economic damage that this black swan event poses to the country’s major airline operators. All these actions are expected to be reflected ahead.
Despite how the airlines industry may fare at present, there’s no better time to dive into these stocks than it is right now. This is because certain quality airline stocks are now trading much below their worth. In addition, the nosedive suffered by these stocks is a temporary blip that is expected to turn around soon.
Coronavirus Impact on Airlines
The fast-spreading disease has taken a toll on businesses for a while now, especially on companies that are integral to the travel sector, such as airlines. Airlines companies witnessed a significant drop in passenger traffic over the past few weeks as customers cancel their bookings and corporates prefer online meetings to face-to-face interactions.
In just a month, shares of some of the giant air carriers, such asLATAM Airlines Group S.A. (NYSE:LTM) , Spirit Airlines, Inc. (NYSE:SAVE) and American Airlines Group Inc. (NASDAQ:AAL) have shed more than 40%. Decrease in travel demands across continents is hampering airline business.
In addition, earlier this week, President Donald Trump temporarily suspended travel from most of Europe to the United States. The restrictions are expected to be effective Mar 13 and last for 30 days.
Per The Guardian, these restrictions are applicable to primarily foreigners who paid a visit to the enlisted 26 countries in the Schengen area during the past two weeks before their planned arrival in the United States. These travel restrictions could impact airline stocks in the near term.
However gloomy the airlines industry may appear right now, the space is looking for a recovery ahead. Let’s delve deeper.
Airlines Well-Prepared to Fight This Plunge: Here’s Why
First, some of the major carriers in the country initiated cost-cutting measures. During an Original post
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