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Freighter Demand Boosts Air Transport (ATSG) Amid High Debt
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We have recently updated a report on Air Transport Services Group, Inc. (ATSG - Free Report) .
Air Transport Services has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth.
The stock has gained 4.3% in the past year compared with 8.9% rise of the industry.
Image Source: Zacks Investment Research
Driven by increased demand for midsize freighters, the company issued a bullish adjusted EBITDA view for 2022. The company expects the metric to be $640 million, nearly $100 million above the 2021 levels. Owing to the strength of its freighter leasing and airline operations, ATSG expects adjusted earnings per share for 2022 to be $2 — indicating growth of 20% from the 2021 reported level.
The Cargo Aircraft Management segment has been performing well and registered growth of 11.2%. 12.2%, 18% and 21.8% in fourth-quarter 2020, first-quarter 2021, second-quarter 2021 and third-quarter 2021, respectively. The segment’s revenues increased 26.5% year over year in the fourth quarter of 2021. Revenues in the unit were bumped up by the external leases of four more 767-300 freighters from the year-ago levels. Segmental revenues from external customers came in at 31% in the December quarter.
ATSG is highly leveraged. The company’s debt-to-equity ratio is nearly 1. A high debt-to-equity ratio indicates that the company depends primarily on debt to finance growth.
Investors interested in the broader Zacks Transportation sector can also consider stocks like J.B. Hunt Transport Services, Inc. (JBHT - Free Report) , Union Pacific Corporation (UNP - Free Report) and Triton International Limited .
The long-term expected EPS (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all its segments. While the Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks, the Integrated Capacity Solutions (ICS) unit is gaining from favorable customer freight mix as well as higher contractual and spot rates.
JBHT’s measures to reward shareholders are encouraging. Driven by the tailwinds, the stock has increased 27.9% in the past year. J.B. Hunt currently sports a Zacks Rank #1 (Strong Buy).
The long-term expected EPS (three to five years) growth rate for Union Pacific is pegged at 10%. With economic activities gaining pace, freight revenues (accounting for a bulk of the top line) are improving. Freight revenues increased 11% year over year in 2021. Segment-wise, freight revenues in 2021 increased 12%, 11% and 11% in the bulk, industrial and premium units, respectively.
Driven by the tailwinds, the stock has increased 25.4% in the past year. UNP currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 13.4% in the past year. TRTN currently carries a Zacks Rank #2.
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Freighter Demand Boosts Air Transport (ATSG) Amid High Debt
We have recently updated a report on Air Transport Services Group, Inc. (ATSG - Free Report) .
Air Transport Services has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth.
The stock has gained 4.3% in the past year compared with 8.9% rise of the industry.
Image Source: Zacks Investment Research
Driven by increased demand for midsize freighters, the company issued a bullish adjusted EBITDA view for 2022. The company expects the metric to be $640 million, nearly $100 million above the 2021 levels. Owing to the strength of its freighter leasing and airline operations, ATSG expects adjusted earnings per share for 2022 to be $2 — indicating growth of 20% from the 2021 reported level.
The Cargo Aircraft Management segment has been performing well and registered growth of 11.2%. 12.2%, 18% and 21.8% in fourth-quarter 2020, first-quarter 2021, second-quarter 2021 and third-quarter 2021, respectively. The segment’s revenues increased 26.5% year over year in the fourth quarter of 2021. Revenues in the unit were bumped up by the external leases of four more 767-300 freighters from the year-ago levels. Segmental revenues from external customers came in at 31% in the December quarter.
ATSG is highly leveraged. The company’s debt-to-equity ratio is nearly 1. A high debt-to-equity ratio indicates that the company depends primarily on debt to finance growth.
Zacks Rank & Other Stocks to Consider
Air Transport carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Transportation sector can also consider stocks like J.B. Hunt Transport Services, Inc. (JBHT - Free Report) , Union Pacific Corporation (UNP - Free Report) and Triton International Limited .
The long-term expected EPS (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all its segments. While the Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks, the Integrated Capacity Solutions (ICS) unit is gaining from favorable customer freight mix as well as higher contractual and spot rates.
JBHT’s measures to reward shareholders are encouraging. Driven by the tailwinds, the stock has increased 27.9% in the past year. J.B. Hunt currently sports a Zacks Rank #1 (Strong Buy).
The long-term expected EPS (three to five years) growth rate for Union Pacific is pegged at 10%. With economic activities gaining pace, freight revenues (accounting for a bulk of the top line) are improving. Freight revenues increased 11% year over year in 2021. Segment-wise, freight revenues in 2021 increased 12%, 11% and 11% in the bulk, industrial and premium units, respectively.
Driven by the tailwinds, the stock has increased 25.4% in the past year. UNP currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 13.4% in the past year. TRTN currently carries a Zacks Rank #2.