JPMorgan Chase & Co. and Delta Air Lines Inc. forecast that the economic rebound will boost travel spending. The AMEX Airline Index jumped 3.8% to 28.63 in New York, bringing its climb since Sept. 2 to 26%. The measure, which includes companies from Alaska Air Group Inc. to AMR Corp., has soared 125% since reaching a low on March 9. JPMorgan analysts upgraded UAL Corp. and US Airways Group Inc. in a Sept. 10 report that said the industry’s revenue in the last two months has beaten estimates. Delta, the world’s largest carrier, increased its profit margin estimate yesterday as customers scooped up lowered fares for summer vacations. Economic reports from USretail sales to manufacturing in China have signaled that the global recession is easing. The Dow Jones Transportation Average climbed 0.3% on Tuesday, extending an 8 day advance that has lifted the measure by 11%, according to data compiled by Bloomberg. “You’d be hard pressed to find anything more levered to an economic recovery than airlines,” said Blaze Tankersley, chief market strategist at Bay Crest Partners LLC in New York. “Business is resuming to a normalized state and that’s going to help airlines. We are seeing the return of leisure and business travel.” LTN’s Red Roadmaster recommended investors buy stocks in the industry in August noting that the airline index has jumped 16% since then. UAL, owner of United Airlines has risen 55% since Sept. 2 for the biggest gain on the list. JPMorgan boosted the Chicago-based carrier to “overweight” from “underweight.” Delta is up 25% since Sept. 10, when the Atlanta- based company said it will have a positive operating margin of as much as 4% for the current Q, higher than previously forecast. FedEx Corp. has climbed 16% in the past eight days. The 2nd largest US package-shipping company reported Q-1 profit on Sept. 11 that topped its forecast, a sign that shipping demand is starting to pick up now.
Popularity: unranked [?]
