- Seaport Global analyst Daniel McKenzie downgraded certain companies in the Airlines sector. McKenzie cites "energy market chaos" tied to the Russian/Ukraine war and calls it a "weaker balance sheet story" as the reason behind the downgrade.
- The analyst mentions airlines likely need to begin planning for a worse oil shock. Although pent-up demand "remains great," airlines likely need to cut roughly 10%-15% of capacity from 2022 plans to "gain the kind of pricing power needed to offset the worse oil shock."
- Related: Airlines Depend On Hedging, Fuel Surcharges As Oil Surges: Report
- The analyst downgraded Gol Linhas Aereas Inteligentes SA (NYSE:GOL) to Neutral from Buy and removed his prior price target.
- The analyst downgraded Azul SA (NYSE:AZUL) to Neutral from Buy and removed his price target.
- The analyst downgraded American Airlines Group (NASDAQ:AAL) to Neutral from Buy and removed his prior price target.
- Price Action: GOL shares are trading lower by 8.52% at $5.55, AZUL lower by 10% at $11.67, and AAL lower by 4.25% at $13.97 on the last check Monday.
