We will look at few of the best airline stocks to buy according to hedge funds. Airline stocks went into a free fall after the collapse of Silicon Valley Bank alongside the related jitters in the banking sector, possibility of recession hitting the global economy in 2023 was brought further close to reality. Does it still make sense investing in airline stocks and is the airline industry worth investing in?
Analysts believe the airline industry is not facing any short term risks, and even if recession hits and consumers start to delay their travel plans, if you invest in top airline stocks with good performance of best airline companies it can offer attractive long-term buying opportunity.
Is airline industry investments profitable?
Stock analysts are coming out with clear favorites or top airline investments in the airline industry. If you’re willing to weather some short term gusts for potential long-term gains, these are five of the best airline stocks in 2023 of best performing airline companies to buy now based on analyst opinions:
Delta Air Lines Inc. (DAL)
With a big thumbs up from all analysts, giving Delta a “buy” or “overweight” rating, it’s an obvious choice to kick off this list of best airline stocks for 2023.
The advisory firm ISS, reports that, “DAL is one of the most attractively priced stocks in relation to its true value in the airline industry”. DAL’s return on equity of 25.2% is also the highest within the airline industry. The DAL airline stock performance has remained relatively stable compared to many other airline stocks in 2023.
Ryanair Holdings PLC (RYAAY)
Ryanair is Europe’s dominant low-cost carrier. Ryanair entered COVID-19 in good condition and made it through the pandemic without taking a crippling financial blow. Ryanair had been gaining market share for years thanks to its incredibly cheap prices. Like DAL, ISS views RYAAY as among the top airline investment today. Owing to its performance it is being touted as one of the few long term winners in the airline industry.
Alaska Air Group Inc. (ALK)
Alaska Air is a midsize carrier with its primary hub in Seattle. Alaska serves California and Hawaii extensively in addition to its namesake state. Weakness in tourist markets such as Hawaii will pass, whereas ALK’s strong corporate culture should persist. Morgan Stanley’s latest report set a $71 price target for ALK, with expectations that it will reach this within 12 months.
Controladora Vuela Cia de Aviacion (VLRS)
Mexico has been one of the best performing aviation markets in the Americas. It’s a great time to be a Mexican discount carrier. Controladora Vuela Cia de Aviacion, also known as Volaris, is Mexico’s largest and best performing airline companies of the bunch. The majority of analysts covering the stock give it a “buy” rating.
Copa Holdings SA (CPA)
Copa is another Latin American carrier that is expected to flourish in a rapidly shifting landscape. ISS analysts still report that CPA is among the most attractively priced airlines currently. They also highlight its strong return on capital and “outstanding” profit trend as reasons to buy.
Note:
Investors should understand several airline specific terms before investing in any stocks.
Are airline stocks for you?
The airline industry is cyclical, but the pandemic proved the companies are now strong enough to withstand tough operating conditions without having to fly into bankruptcy.
If you are bullish on long term demand for travel, buying into a well-run airline is a way for your investment dollars to go along for the ride.
