Airline stocks have rebounded strongly from their lows, reflecting stellar air travel demand. While shares of several airline companies have outperformed the broader markets this year, the Transportation Security Administration (TSA) anticipates passenger volumes to surpass pre-COVID levels during this summer travel season. This could further boost airline stocks. Let’s leverage TipRanks’ data to narrow down on airline stocks more likely to deliver solid gains.
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Top Airline Stocks to Consider
Robust travel demand and lower jet fuel costs have driven airline stocks higher. For instance, shares of United Airlines (NASDAQ: UAL), Delta Air Lines (NYSE:DAL), and American Airlines (NASDAQ:AAL) are up about 42.5%, 40.9%, and 38.4%, respectively, on a year-to-date basis.
While these stocks have delivered significant gains so far this year, the TSA announced that it had screened nearly 2.4 million people per day at airports nationwide in June. Further, with sustained high passenger volumes, TSA expects passenger volumes to surpass 2019 pre-pandemic levels this July holiday and summer travel season. This provides a significant investment opportunity for investors.
Our Stock Comparison tool shows that shares of Delta Air Lines, which have already registered substantial gains, continue to remain analysts’ favorite. Analysts are also optimistic about Frontier Group Holdings’ (NASDAQ:ULCC) stock, which has underperformed its peers and the broader market so far this year.
As DAL and ULCC received a Strong Buy consensus rating and an Outperform Smart Score on TipRanks, let’s see how high these stocks could rise according to analysts’ average price targets.
How High Will Delta Stock Go?
The analysts’ 12-month average price target of $57.43 implies Delta stock could increase by another 24.01% from its current levels.
Delta is benefitting from the rebound in demand. It started 2023 on a solid note, with higher sales and earnings. The company generated about $2 billion in free cash flow in Q1, reflecting robust summer travel demand. Further, its management remains upbeat and expects significant earnings improvement in the coming quarters.
DAL stock has received 15 unanimous Buy recommendations for a Strong Buy consensus rating. In addition, DAL stock sports a maximum Smart Score of “Perfect 10.”
What is the Price Target for Frontier?
Frontier delivered total operating revenues of $848 million in Q1, a record for the first quarter, the company noted. ULCC’s management remains upbeat and expects demand for leisure travel to sustain itself, driving its financial performance. Further, lower jet fuel costs will support earnings.
Frontier stock has received six Buy and two Hold recommendations, translating into a Strong Buy consensus rating. Moreover, analysts’ 12-month average price target of $15.19 implies 61.77% upside potential from current levels.
ULCC stock has an Outperform Smart Score of nine on TipRanks.
