ULCC - Airline stocks underperformed in August as full recovery timeline pushed out

Bank of America runs a valuation check on U.S. airline stocks with August in the books. The sector underperformed the S&P 500 Index for the 3rd straight month amid Delta COVID concerns and with labor issues impacting certain carriers. The firm notes that 70% of airline stocks still trade above the midpoint of historical EBITDAR multiple levels vs. 90% at the end of May, with Hawaiian Holdings (HA -0.2%), Alaska Air Group (ALK -0.2%) and JetBlue (JBLU -0.5%) trading below their historical midpoint. "Meanwhile, the group trades at an average market cap and enterprise value that is 87% and 91% of 2019 levels, respectively (vs 87% and 96% of 2019 levels, respectively, in July)." Short interest rose in August on Spirit Airlines (SAVE -0.4%) and Frontier Group (ULCC +3.0%), while falling back on Mesa Airlines (MESA -0.8%) and ALK. Airlines bookings momentum slowed down for the fifth straight week on

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Airline stocks underperformed in August as full recovery timeline pushed out