Here are the 3 Best Airline Stocks to buy in July 2024, according to Wall Street analysts. Air carriers are running at nearly full load capacity, thanks to peak demand due to the U.S. summer vacations and the upcoming 2024 Summer Olympics in Paris. This seems like a good time to visit the players in the airline industry to gauge which one of them is leveraging the boom in travel demand.
We used the TipRanks Stock Comparison tool to select three airline stocks with a Strong Buy consensus rating and over 30% price target upside potential in the next twelve months. Interestingly, these three stocks have won unanimous Buy views from analysts, displaying their solid growth trajectory. Let’s dive right into them and discuss their prospects.
#1 Sun Country Airlines Holdings (NASDAQ:SNCY)
Sun Country Airlines Holdings boasts to be a new breed of hybrid low-cost carrier in the U.S., offering scheduled passenger services, charter, and cargo operations. It is more of a regional operator, flying within the U.S., Mexico, Canada, Central America, and the Caribbean.
Importantly, Sun Country has an Air Transport Services Agreement with major customer, Amazon (NASDAQ:AMZN) until 2030 for transporting its cargo across the nations. The company even expanded its cargo fleet to 20 from 12, all of which are provided by Amazon. Morgan Stanley analyst Ravi Shanker believes the deal will add $1 to the company’s earnings per share (EPS) from the second half of 2025.
SNCY recently lowered the upper end of its revenue guidance for Q2 FY24 and now expects its top line to be between $255 million and $257 million, while the consensus is pegged a bit higher at $258.33 million. At the same time, Block Hours for FY24 are expected to show year-over-year growth of 9% and 5% for the passenger segment and Cargo segment, respectively.
The company undertakes regular share buybacks to reward shareholders. In Q1 FY24, SNCY repurchased $11.5 million worth of stock.
Is Sun Country a Good Stock to Buy?
With five unanimous Buy views on TipRanks, SNCY stock has a Strong Buy consensus rating. The average Sun Country Airlines Holdings price target of $19.80 implies an impressive 56.4% upside potential from current levels. Year-to-date, SNCY shares have lost 19.5% of their value.
#2 United Airlines Holdings (NASDAQ:UAL)
Chicago-based United Airlines Holdings is the parent company of United Airlines, one of the “big four” air carriers in the U.S. The company’s massive aircraft fleet operates across six continents, offering both passenger and cargo transport services.
UAL is scheduled to report its Q2 FY24 results on July 17, after the market closes. The Street expects UAL to post adjusted EPS of $3.99 on revenues of $15.15 billion. In the prior year period, UAL reported adjusted EPS of $5.03 on revenues of $14.18 billion.
In mid-May, UAL stated that it is expecting 3 million travelers to fly during the Memorial Day holiday, between May 23-28, boosting its Q2 revenues. Moreover, United announced the addition of 200 new flights to and from Milwaukee in July and 118 flights to and from Chicago in August. This step will help attendees and political enthusiasts travel easily to the summer’s national political conventions, while also increasing the Q3 sales.
Is UAL a Good Stock to Buy?
With 16 unanimous Buy ratings, UAL stock commands a Strong Buy consensus rating on TipRanks. The average United Airlines Holdings price target of $71.70 implies 48.8% upside potential from current levels. UAL shares have gained nearly 17% so far this year.
#3 Delta Air Lines (NYSE:DAL)
Delta Air Lines, another “big four” U.S. air carrier, positions itself as a leisure and business travel carrier. Atlanta-based Delta flies nearly 200 million travelers to 275 destinations across 50 countries, with up to 4,000 daily departures.
Interestingly, the company’s board recently raised its quarterly dividend by 50% to $0.15 per share. The revised dividend reflects a current yield of 0.63%.
DAL is set to report its Q2 FY24 results on July 11, before the market opens. The Street expects Delta to post adjusted earnings of $2.36 per share on revenues of $15.47 billion. Meanwhile, the company had guided for revenue growth of 5% to 7% over Q2 FY23 (roughly $16.51 billion at the mid-point) and adjusted EPS range of $2.20 to $2.50. In the comparative period last year, DAL reported adjusted earnings of $2.68 per share on revenues of $15.58 billion.
What is the Future of Delta Stock?
Analysts are highly optimistic about Delta’s stock trajectory. On TipRanks, DAL has a Strong Buy consensus rating backed by 17 unanimous Buys. The average Delta Air Lines price target of $61.30 implies 31.2% upside potential from current levels. Meanwhile, DAL shares have gained 16.6% so far in 2024.
Ending Thoughts
The above three Airline stocks offer great exposure to the budding airline industry both within and outside of the U.S. Analysts prefer these stocks owing to their sound financial standing and robust growth prospects. Investors who want to gain exposure to the airline sector can choose from these stocks after thorough research.
