JP Morgan downgrades airline stocks... look out below

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NEW YORK (MarketWatch) -- J.P. Morgan on Wednesday downgraded several airline carriers ahead of a possible recession and now assumes a revenue reversal of 6% to 7%, beginning in the second quarter. In a note to investors, the investment firm cut its ratings for Alaska Air to neutral from overweight. "If oil falls, then everything potentially looks cheap," J.P. Morgan stated. "But how likely are these outcomes? More likely, in our view, is that oil sits tight but revenue trends reverse."
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The Fed's accepting bad loans in exchange for cash and continued interest rate cuts are destroying the value of the dollar. We buy jet fuel in dollars that are falling in value like a Steinway off a Manhattan Skyscraper.

This combined with softer revenues could get very ugly, very quick. None of our employers have the cash cushion, or available credit, to ride out this storm if it happens.

DAL/NWA/AF/KLM may be a necessity, as well as BA/AA and some sort of CAL combo just to link to revenues which are not arriving in peso's, whoops, I mean Dollars.

If oil goes down (which is not expected) you could see easy 300% gains in shares of DAL, NWA, AA, UAL, CAL, etc... It is either a heck of a buying opportunity or the beginning of a restructuring like we've never seen before.

 

[JoeMerchant]

NEW YORK (MarketWatch) -- J.P. Morgan on Wednesday downgraded several airline carriers ahead of a possible recession and now assumes a revenue reversal of 6% to 7%, beginning in the second quarter. In a note to investors, the investment firm cut its ratings for Alaska Air to neutral from overweight. "If oil falls, then everything potentially looks cheap," J.P. Morgan stated. "But how likely are these outcomes? More likely, in our view, is that oil sits tight but revenue trends reverse."
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The Fed's accepting bad loans in exchange for cash and continued interest rate cuts are destroying the value of the dollar. We buy jet fuel in dollars that are falling in value like a Steinway off a Manhattan Skyscraper.

This combined with softer revenues could get very ugly, very quick. None of our employers have the cash cushion, or available credit, to ride out this storm if it happens.

DAL/NWA/AF/KLM may be a necessity, as well as BA/AA and some sort of CAL combo just to link to revenues which are not arriving in peso's, whoops, I mean Dollars.

If oil goes down (which is not expected) you could see easy 300% gains in shares of DAL, NWA, AA, UAL, CAL, etc... It is either a heck of a buying opportunity or the beginning of a restructuring like we've never seen before.

....that's why I voted for Ron Paul....I don't agree with him on everything....but he "gets it" regarding the economy and the actions of the US government.....The Dems. don't get it and the Republicans seem to want to ignore it.....

....I believe the chickens are coming home to roost......

 

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Wasted vote.

<<< Voted for Huckabee, a vote for the Fair Tax. Hope it wasn't wasted. Will switch parties to keep McCain out.

 

[JoeMerchant]

Wasted vote.

<<< Voted for Huckabee, a vote for the Fair Tax. Hope it wasn't wasted. Will switch parties to keep McCain out.

Both were "technically" waisted votes.....But both were used to send messages....I supported the fair tax also...but it must be accomplished with massive spending cuts.....We are mortgaging our future.....We are spending money we don't have....

McCain is better than Hillary or Obama....He is hawk on spending and that get's my vote....

 

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Not sure if we are spending it, or just giving it away to support market liquidity....

When you spend money you typically get something in return. Bernake's just pretty much giving it away to anyone who will take it. Of course you have to have a few billion in non-performing "collateral" to play.

 

[Bai B Nai]

Not to step on anyone's toes here, but I would question anyone who bought airline stock as an investment. Last I checked most were zero yield, zero dividend paying, and yes, zero growth.

About a year and a half ago, MSNBC did their 'Day in the Life' program on American Airlines. During the program, which was pretty interesting, they dug up Robert Crandall and he said something to the effect that he would never own airline stock as an investment vehicle. At the time I thought that was a nice vote of confidence (sarcasm.)

But regardless of what he says, airline stock has always been a roller coaster in terms of real returns.

 

[dudemize]

Wow, the airlines really did take a beating today, led by DAL and NWA, each down around 16%. AMR not far behind at -13%.

 

[Old School 737]

Alaska got hammered, down over 4 bucks!!!!!!

 

[jke406]

Alaska got hammered, down over 4 bucks!!!!!!

how's SWA's looking these past few years?

has their willful non-compliance with FAA directives helped their stock much?

 

[tomgoodman]

Experts

NEW YORK (MarketWatch) -- J.P. Morgan on Wednesday downgraded several airline carriers ahead of a possible recession and now assumes a revenue reversal of 6% to 7%, beginning in the second quarter. In a note to investors, the investment firm cut its ratings for Alaska Air to neutral from overweight. "If oil falls, then everything potentially looks cheap," J.P. Morgan stated. "But how likely are these outcomes? More likely, in our view, is that oil sits tight but revenue trends reverse."

As usual, a carefully-hedged prediction. J.P. Morgan himself was once asked: "Is it true that you know in advance what the market is going to do?" He replied: "Yes, I do. The market will tend to....fluctuate."