US Airlines: 2Q26 Mid-EPS Update: Guidance Stale As Soon As It Is Issued; Downside to 2H26 Consensus EPS In Many Cases

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US Airlines: 2Q26 Mid-EPS Update: Guidance Stale As Soon As It Is Issued; Downside to 2H26 Consensus EPS In Many Cases

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24 Jul 2026 03:43:17 ET │ 27 pages

US Airlines

2Q26 Mid-EPS Update: Guidance Stale As Soon As It Is Issued;

Downside to 2H26 Consensus EPS In Many Cases

John Godyn AC

CITI'S TAKE +1-212-816-8014

We're updating EPS estimates and price targets as a result of multiple recent john.godyn@citi.com

EPS prints including AAL, ALK, LUV, and SKYW. In addition, we revisit our Max Lesnik

DAL and UAL models. Sharply rising fuel prices during earnings season have

made company guidance stale almost as soon as it was released and we +1-212-816-2382

take a ‘first attempt’ at normalizing models for more consistent fuel/RASM max.lesnik@citi.com

assumptions that reflect current macro conditions. In many cases, we now

see downside to 2H consensus EPS estimates although our 2027/28 EPS

estimates were ultimately changed very little at most airlines. We reiterate

Buy ratings on DAL, UAL, AAL and ALGT as well as our Sell rating on ALK,

where we are notably below a uniformly bullish consensus.

Revisiting 2Q26 preview thoughts. In our 2Q26 preview, we argued that the stocks

were likely to move “Higher Before Lower as Early Reporters Likely Outperform Late-

Reporters.” Although the logic of more aggressive capacity growth guidance

weighing on the group has had merit, spiking oil prices at the start of earnings

season turned ‘Higher Before Lower’ into ‘Lower Before Even Lower.’ As was the case

in March/April – the airlines that demonstrated earnings resiliency earned new highs

in their stock prices later in 2Q. Months from now, we expect to look back to today

and observe a similar theme has played out.

4Q26 capacity growth continues to be a focal point.