Morgan Stanley buyers of any weakness in airline stocks after United report

After United Airlines reported Q2 EPS that was “comfortably above” consensus, but gave Q3 guidance well below the Street, Morgan Stanley said investors are likely to view the guidance as very conservative and believes the market will be willing to look through it. The firm, which believes commentary is more forward looking and relevant than United’s disappointing Q3 guidance, would “(again) be buyers of any weakness in Airline stocks in the coming days” as United’s commentary calling for industry capacity inflection as early as mid-August, which the firm believes might be 6-8 weeks before even bullish expectations, should set up the stock and the space nicely for the second half and into 2025. Morgan Stanley has an Overweight rating on United shares.