US airline stocks slip as Jefferies downgrades major carriers

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Andrew Kessel

Tue, Apr 1, 2025, 7:37 AM 1 min read

Jeffereis downgraded American, Delta, and Southwest, sending shares of each 3 companies lower.
The analysts called user sentiment "disappointing" and pointed to rising uncertainty astir tariffs.
The 3 airlines antecedently slashed their first-quarter forecasts, and analysts expect reductions to their full-year estimates.

Airline stocks slumped Tuesday aft Jefferies analysts lowered their ratings for 3 of the 4 large U.S. carriers, penning “consumer sentiment continues to disappoint.”

The broker dropped American Airlines (AAL) and Delta Air Lines (DAL) to “hold” from “buy,” and Southwest (LUV) down to “underperform,” sending shares of each 3 companies betwixt 3% and astir 5% little successful aboriginal trading Tuesday.

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The downgrades travel aft Delta, Southwest, and American each lowered their projections for the archetypal 4th of the year, citing an uncertain macroeconomic environment, on with utmost weather. Jefferies expects the airlines to chopped their full-year projections arsenic well, with uncertainty “swelling” astir the interaction of tariffs expected to instrumentality effect this week.

United Airlines (UAL) is the lone U.S. bearer with a "buy" standing from Jeffieres, fixed its "[opportunity] beyond 2025” and a strategy that “remains astatine the forefront of the industry.” Shares of United slid much than 4% connected Tuesday.

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However, United isn’t immune from macro trends. In 2024, each 4 large airlines reported a higher outgo per disposable spot mile than rider gross per disposable spot mile, meaning they’re efficaciously losing wealth transporting passengers. The companies are inactive profitable, but it's owed successful portion to the maturation of lucrative co-branded recognition cards, specified arsenic United’s narration with JPMorgan Chase (JPM).

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