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Best airline stocks to buy ahead of the summer holidays season

Mircea Vasiu

Ahead of the summer holidays season begins, here are three airline stocks to buy: Southwest Airlines, Alaska Air, and Ryanair Holdings.

After the COVID-19 pandemic impacted travel in 2020 and 2021, this year is the first one when people can travel without limitations. A busy summer lies ahead, and airlines have already upgraded their second-quarter revenue projections.

The total returns in 2022 for the airline stocks have outpaced the S&P 500 index. So is there scope for more?

Here are three airline stocks to buy ahead of the summer holiday season: Southwest Airlines, Alaska Airlines, and Ryanair Holdings.  

Southwest Airlines

Southwest Airlines (NYSE:LUV) is one of the largest US airlines. It operates over 700 aircraft and serves over 120 destinations.

It does not pay a dividend, and the stock price is flat YTD, while the S&P 500 index has delivered negative returns so far in the year. Revenue has been growing at a hefty pace recently, exceeding 168.45% YoY, and the company’s market capitalization has reached $26 billion.

Alaska Air

Alaska Air (NYSE:ALK) flies to over 120 destinations in North America, and revenue is estimated at $9.35 billion in 2022. It does not pay a dividend, and most analysts are bullish about its stock price. 

Out of the 26 analysts covering the stock price, 16 have issued buy ratings, and 10 have neutral ones. No analyst has issued a sell rating. 

The stock price is down a little over 9% YTD. 

Ryanair Holdings

Ryanair Holdings (NASDAQ:RYAAY) is a low-cost carrier from Europe. It is Europe’s largest airline, with an average of close to 3,000 flights per day, and flies short destinations in Europe. 

The stock price is down -18.7% YTD, and the company pays no dividends to its shareholders. The annual revenue estimate for the fiscal period ending March 2023 is $10.39 billion, and at the current market price, the company is valued at $16.83 billion. 

Ryanair was recently upgraded to buy at Raymond James Financial with a $125/share price target.