10 Best Airline Stocks To Buy According To Short Sellers

4. Copa Holdings, S.A. (NYSE:CPA)

% of shares shorted: 4.67% 

Number of Hedge Fund Holders: 24                                                       

Through code-share agreements with UAL and other airlines, Copa offers customers access to flights to over 180 different destinations. From its hub in Panama City, Copa currently operates regular flights to 82 locations in 32 countries in North, Central, and South America as well as the Caribbean, with an average of about 375 flights each day. Since June 2012, it has been a part of Star Alliance.

Morgan Stanley’s Jens Spiess kept a “Buy” rating on Copa Holdings, S.A. (NYSE:CPA) with a price target of $130.00, highlighting the airline’s outstanding operational performance as seen by its strong 9.5% YoY traffic growth in July 2024 and its continuous 9.2% capacity expansion year-to-date. Spiess emphasizes the airline company’s capacity management skills in sustaining demand, which bolsters the company’s optimistic financial forecast. Additionally, TD Cowen reaffirmed its Buy rating for the stock with the same price target, boosting investor confidence.

Copa Holdings, S.A. (NYSE:CPA) announced a 10.6% growth in passenger traffic YoY. Despite a decline in yield and revenue per available seat mile, overall revenue increased by 1.3% to $819.4 million YoY. The company has strengthened its position as the leader in the industry by adding new aircraft to its fleet and maintaining excellent on-time performance.

However, its unit revenues and passenger yield declined in Q2 2024, suggesting a difficult operating environment. The firm’s capacity and unit revenue guidance have also been impacted by the suspension of flights to Venezuela, which presents additional difficulties for its financial performance.

Copa Airlines is confident in its comeback and plans to operate at full capacity by December despite these obstacles. The firm also reached a reasonable compensation deal with Boeing regarding the MAX 9 grounding. Furthermore, the success of the company’s direct connect approach and increased revenue efficiency is demonstrated by the fact that over 80% of its bookings currently originate from direct or NDC channels.

Moreover, Jim Simons’s Renaissance Technologies is one of the biggest stakeholders in the company, with 871,928 shares worth $82.99 million as of Q2, 2024. The average Wall Street analyst price target forCopa Holdings, S.A. (NYSE:CPA) is $147.6, which presents a 61.86% upside potential from the current price of $91.19.