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Here's Why Investors Should Hold Hawaiian Holdings (HA) Now
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Hawaiian Holdings (HA - Free Report) is benefiting from buoyant air-travel-demand scenario. However, low liquidity is concerning.
Factors Favoring HA
HA is expanding capacity to meet the robust air-travel-demand scenario. Management provided an impressive view for available seat miles (ASM) for the third quarter of 2023. ASM is anticipated to increase in the 4.5-7.5% range from third-quarter 2022 levels. Betterment in load factor (percentage of seats filled by passengers) owing to improved traffic is an added positive.
Hawaiian Airlines received an encouraging news on the labor front when its pilots, represented by Air Line Pilots Association, cleared a four-year deal. Following the approval, pilots of the carrier are eligible for pay-hikes that will average more than 32% over the four-year period.
Other benefits include the presence of a $10 million ratification bonus and the creation of a new $2,500 health reimbursement account. The deal will also result in improvement in quality of life of pilots by providing more schedule flexibility apart from raising company retirement contributions.
Key Risks
In second-quarter 2023, HA's current ratio (a measure of liquidity) was pegged at 1.19. The reading was lower than 1.26 and 1.50 recorded in first-quarter 2023 and fourth-quarter 2022, respectively. A declining current ratio is alarming as it may imply an increase in short-term debts or a decrease in current assets or both.
Zacks Rank
HA currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Delta Air Lines, Inc. (DAL - Free Report) and Kirby Corporation (KEX - Free Report) .
Delta, which presently carries a Zacks Rank #2 (Buy), is aided by improved air-travel demand. Management raised its earnings per share guidance for the current year. The company expects 2023 earnings (on an adjusted basis) in the band of $6-$7 per share (earlier view was $6). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For third-quarter and full-year 2023, DAL’s earnings are expected to register 55.6% and 108.4% growth, respectively, on a year-over-year basis.
Kirby currently carries a Zacks Rank #2. Strong segmental performances are boosting Kirby’s top line.
For third-quarter and 2023, KEX’s earnings are expected to record 58.5% and 76.2% improvement, respectively, on a year-over-year basis.
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Here's Why Investors Should Hold Hawaiian Holdings (HA) Now
Hawaiian Holdings (HA - Free Report) is benefiting from buoyant air-travel-demand scenario. However, low liquidity is concerning.
Factors Favoring HA
HA is expanding capacity to meet the robust air-travel-demand scenario. Management provided an impressive view for available seat miles (ASM) for the third quarter of 2023. ASM is anticipated to increase in the 4.5-7.5% range from third-quarter 2022 levels. Betterment in load factor (percentage of seats filled by passengers) owing to improved traffic is an added positive.
Hawaiian Airlines received an encouraging news on the labor front when its pilots, represented by Air Line Pilots Association, cleared a four-year deal. Following the approval, pilots of the carrier are eligible for pay-hikes that will average more than 32% over the four-year period.
Other benefits include the presence of a $10 million ratification bonus and the creation of a new $2,500 health reimbursement account. The deal will also result in improvement in quality of life of pilots by providing more schedule flexibility apart from raising company retirement contributions.
Key Risks
In second-quarter 2023, HA's current ratio (a measure of liquidity) was pegged at 1.19. The reading was lower than 1.26 and 1.50 recorded in first-quarter 2023 and fourth-quarter 2022, respectively. A declining current ratio is alarming as it may imply an increase in short-term debts or a decrease in current assets or both.
Zacks Rank
HA currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Delta Air Lines, Inc. (DAL - Free Report) and Kirby Corporation (KEX - Free Report) .
Delta, which presently carries a Zacks Rank #2 (Buy), is aided by improved air-travel demand. Management raised its earnings per share guidance for the current year. The company expects 2023 earnings (on an adjusted basis) in the band of $6-$7 per share (earlier view was $6). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For third-quarter and full-year 2023, DAL’s earnings are expected to register 55.6% and 108.4% growth, respectively, on a year-over-year basis.
Kirby currently carries a Zacks Rank #2. Strong segmental performances are boosting Kirby’s top line.
For third-quarter and 2023, KEX’s earnings are expected to record 58.5% and 76.2% improvement, respectively, on a year-over-year basis.