Where To From Here for US Airline Stocks?

Research evidence excerpt

Where To From Here for US Airline Stocks?

Global Research

16 June 2026ab

US Airlines Equities

AmericasWhere To From Here for US Airline Stocks?

Airlines

Atul Maheswari

We see the micro coming back to focus for the group Analyst

The JETS ETF has rallied 12% over the past 3 sessions on optimism around the end to the atul.maheswari@ubs.com

Iran conflict and the potential re-opening of the Strait of Hormuz this Friday. Still, US +1-212-713 4103

airline stocks were off their intra-day highs today (JETS down -150 bps from highs), Thomas Wadewitz

which suggests to us that these stocks might consolidate for the very near-term. From Analyst

here, volatility around macro headlines should normalize and micro/stock fundamentals thomas.wadewitz@ubs.com

should come back to focus with 2Q results likely to be the next catalyst. We believe +1-212-713 6116

upward earnings revisions will be required to propel US airline stocks to the next level.

On 2027 consensus estimates, DAL is now trading at 10.5x, LUV at 10x, UAL at

8.5x, AAL at 7x, AC at 10.5x, and ALK at 8x. These multiples appear broadly

reasonable to even full (except for UAL & ALK which could see valuation upside).

Said another way, we believe a portion of the upward move from multiple

expansion has broadly played out for most airlines for the near-term. Earnings

support is critical to drive the next leg of the move. This support could come from

2Q earnings where airlines should provide 3Q and FY outlooks.

Consensus 2H RASM estimates of 11-13% for the big 3 implicitly assume a step

down in demand later in the year. However, our checks and conversations with

companies recently suggest little to no demand slowdown thus far. This leaves

room for upside to 2H consensus RASM estimates. On EPS, we believe upward