The 10-member S&P Supercomposite Airlines Index is down more than 9% in August, on pace for the worst month since December. The slump coincides with a souring mood on Wall Street toward the sector: Analysts have cut their earnings-per-share estimates for 2023 by an average of about 15% in the past month for the index members, according to data compiled by Bloomberg.
“With the airlines, particularly in the domestic market, we are well past the peak,” said Conor Cunningham, an analyst at Melius Research. “You look out to 2024 and the pricing environment’s worse and now you have fuel higher.”This week, Cunningham reduced 2024 targets for every US airline he covers — outside of Hawaiian Holdings Inc. — as costlier fuel compounds the hit from lower fares. Earlier in the month, Goldman Sachs Group Inc.
“We believe getting estimates more aligned with reality and better seasonality should improve sentiment over time,” he wrote in an Aug. 28 research note.
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