Let’s talk about three transportation sector stocks, Alaska Air Group (ALK stock), American Airlines (AAL stock), and Union Pacific Corporation (UNP stock), which are all expected to release their earnings reports for the third quarter of 2022 on October 20. These companies are all scheduled to report their earnings on October 20.
There is now just one S&P 500 transportation business that has released its figures for the third quarter of 2022, and that company is Delta Air Lines, Inc. DAL. Delta’s sales of $13,975 million were lower than the Zacks Consensus Estimate of $14,157.2 million; but, year-over-year growth of more than 52% was achieved as a result of robust demand for air travel. The scenario of robust demand for air travel is also obvious from the 11% rise in overall operating revenue compared to the levels seen in the third quarter of 2019 (before the coronavirus).
The prospects of the Transportation industry have been hampered by headwinds such as inflation-induced market instability, supply-chain issues, and high fuel prices; yet, the participants in the sector have been helped by certain positives despite these challenges. Despite some modest setbacks, there has been a significant increase in freight demand due to the expansion of economic activity. This allowed for the expansion of participants in the transportation industry, such as railroad operators.
As a result of COVID-related limitations being eased, individuals have resumed their normal day-to-day activities, which has led to a substantial resurgence in demand for air travel. The positive impact of this factor on the sector’s airline firms was significant. Even if the economies have started to recover, customers still have a strong desire to purchase online. Additionally, the fact that demand for online shopping is still strong bodes well.
The optimism that surrounds the industry is made clear by the most recent Earnings Preview report, which says that stocks in the Transportation sector are anticipated to record a year-over-year increase in earnings of 48.4% and revenue growth of 20.6% in the third quarter of 2022.
According to the findings of our statistical model, the probability of a favorable earnings surprise is increased when the company in question possesses both a positive Earnings ESP and a Zacks Rank of at least 3 (Hold) as of the date of the earnings release. Using our Earnings ESP Filter, you can find out which stocks are the best to buy or sell before the earnings are published.
AAL Stock Forecast
Increased demand for air travel and an improvement in passenger revenues may have helped American Airlines’ revenues. In addition, the optimistic top-line forecast that AAL has provided is very positive. It is projected that total sales in the third quarter of 2022 will increase by approximately 10–12% compared to the level reported in the third quarter of 2019. The management anticipates that TRASM will be 20-24% higher than the actuals for the third quarter of 2019.
On the other hand, a spike in oil prices continues to be an overhang on AAL’s bottom line, notwithstanding recent declines in this market factor. The price of fuel per gallon is anticipated to fall somewhere between $3.73 and $3.78 during the third quarter of 2022.
Featured Image- Megapixl @ Pavel0887
Author Valerie Remorosa 
