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Here's Why You Must Bet on Air Transport Services (ATSG) Now
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Air Transport Services Group (ATSG - Free Report) is benefiting from an upbeat demand for mid-size air freighters. The buoyant demand scenario may be attributable to the continued expansion of global express and e-commerce markets. This, in turn, has made the ATSG stock an attractive investment opportunity currently.
Let’s delve deep to unearth the factors working in favor of the Zacks Rank #1 (Strong Buy) stock.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings have been revised 7% and 8.6% upward over the past 60 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at the brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Bullish Industry Rank: The industry, to which ATSG belongs, currently has a Zacks Industry Rank of 32 (of 250 plus groups). Such a solid rank places Air Transport Services in the top 13% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, an ordinary stock in a strong group is likely to outperform a robust stock in a weak industry. Therefore, taking the industry’s performance into consideration becomes imperative.
Demand Surge: The uptrend with respect to e-commerce even in the post-pandemic scenario is a huge positive for Air Transport Services. E- commerce growth is the primary driver behind the uptick in demand for midsize air freighters.
With shippers replacing their older, less fuel-efficient equipment, ATSG’s freighters have emerged as suitable replacements. Driven by the upbeat demand, ATSG has delivered a record six converted freighters under lease in a month to its customers worldwide.
Impressive Price Performance: Shares of ATSG have gained 28.5% over the past three months compared with its industry’s growth of 4.7%.
United Airlines is seeing steady recovery in domestic and international air-travel demand. Owing to this, UAL expects revenues for the September quarter to grow 10-13% year over year. Our third-quarter total revenue estimate hints at an increase of 11.4% year over year.
For third-quarter 2023, United Airlines anticipates capacity to improve 16% from the year-ago reported figure. The Zacks Consensus Estimate for UAL’s current-year earnings has been revised 19.7% upward over the past 60 days.
We are impressed by GXO’s efforts to strengthen its logistics capabilities. The rapid growth of e-commerce, automation and outsourcing is serving the company well.
The Zacks Consensus Estimate for GXO’s current-year earnings has been revised 4% upward over the past 60 days. GXO has surpassed the Zacks Consensus Estimate for earnings in each of the past four quarters by an average of 11.26%.
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Here's Why You Must Bet on Air Transport Services (ATSG) Now
Air Transport Services Group (ATSG - Free Report) is benefiting from an upbeat demand for mid-size air freighters. The buoyant demand scenario may be attributable to the continued expansion of global express and e-commerce markets. This, in turn, has made the ATSG stock an attractive investment opportunity currently.
Let’s delve deep to unearth the factors working in favor of the Zacks Rank #1 (Strong Buy) stock.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings have been revised 7% and 8.6% upward over the past 60 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at the brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Bullish Industry Rank: The industry, to which ATSG belongs, currently has a Zacks Industry Rank of 32 (of 250 plus groups). Such a solid rank places Air Transport Services in the top 13% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, an ordinary stock in a strong group is likely to outperform a robust stock in a weak industry. Therefore, taking the industry’s performance into consideration becomes imperative.
Demand Surge: The uptrend with respect to e-commerce even in the post-pandemic scenario is a huge positive for Air Transport Services. E- commerce growth is the primary driver behind the uptick in demand for midsize air freighters.
With shippers replacing their older, less fuel-efficient equipment, ATSG’s freighters have emerged as suitable replacements. Driven by the upbeat demand, ATSG has delivered a record six converted freighters under lease in a month to its customers worldwide.
Impressive Price Performance: Shares of ATSG have gained 28.5% over the past three months compared with its industry’s growth of 4.7%.
Image Source: Zacks Investment Research
Other Key Picks
Investors interested in the Zacks Transportation sector may also consider stocks like United Airlines (UAL - Free Report) and GXO Logistics (GXO - Free Report) . UAL sports a Zacks Rank #1 and GXO carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Airlines is seeing steady recovery in domestic and international air-travel demand. Owing to this, UAL expects revenues for the September quarter to grow 10-13% year over year. Our third-quarter total revenue estimate hints at an increase of 11.4% year over year.
For third-quarter 2023, United Airlines anticipates capacity to improve 16% from the year-ago reported figure. The Zacks Consensus Estimate for UAL’s current-year earnings has been revised 19.7% upward over the past 60 days.
We are impressed by GXO’s efforts to strengthen its logistics capabilities. The rapid growth of e-commerce, automation and outsourcing is serving the company well.
The Zacks Consensus Estimate for GXO’s current-year earnings has been revised 4% upward over the past 60 days. GXO has surpassed the Zacks Consensus Estimate for earnings in each of the past four quarters by an average of 11.26%.