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GOL Linhas (GOL) Touches 52-Week High on Multiple Tailwinds

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Shares of GOL Linhas Aereas Inteligentes S.A. hit a 52-week high of $18.73 during the trading session on Sep 1, before retracing a bit to close at $18.17. Notably, the company’s shares have performed very well in the last six months. The stock has rallied 25.4%, comfortably outperforming the industry’s gain of 1.4%.

 

Catalysts Behind theSurge

GOL Linhas is focused on improving operating results with growth in load factor, enhanced customer experience and cost reduction initiatives.

The carrier’s full year 2017 view is encouraging, as it benefits from an improving Latin American economy. The company expects earnings before interest and taxes (EBIT) margin — a measure of the company’s earnings ability — in the band of 7-9%. The guidance for EBITDA margin stands in the 12-14% range. Load factor (% of seats filled by passengers) is projected to increase in the range of 77-79% for 2017.

The carrier has taken appreciative steps to overcome struggles. In fact, it has been undergoing a thorough restructuring process to revive itself. The airline is also making constant efforts to reduce debt levels.  We expect the company’s focus on capacity discipline to boost  yields.

Zacks Rank & Other Stocks to Consider

GOL Linhas currently carries a Zacks Rank #2 (Buy). Investors interested in airline space may also consider other bullish-ranked stocks like Deutsche Lufthansa AG (DLAKY - Free Report) , SkyWest, Inc. (SKYW - Free Report) and Air France-KLM SA (AFLYY - Free Report) . While Deutsche Lufthansa and SkyWest sport a Zacks Rank #1 (Strong Buy), Air France-KLM carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. 

While shares of Deutsche Lufthansa and Air France-KLM surged more than 100% in a year, SkyWest shares have gained around 23% over the same time frame.

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