LUV - Maui wildfires impact Hawaiian Holdings Host Hotels & Resorts and Hawaiian Electric

2023-08-12 09:31:12 ET

The impact of the devastating wildfires in Maui is still being calculated, with the death toll reaching 67 as rescue efforts continue on Saturday. The destruction of tourist and residential areas is also having an impact on certain stocks.

In the airline sector, Hawaiian Holdings ( NASDAQ: HA ) fell by 8.5% over the last week due in part to the airline having the highest exposure of flights to Maui. TD Cowen warned the recovery in Maui could take years due to the length of time it will take to process insurance claims and the extra time it takes to get building materials to the remote location. Resort destinations in Maui are likely to disappear from the foreseeable future, warned analyst Helane Becker, although the other islands are expected to remain an aspirational vacation destination. The loss of flights into Maui will also be a small consideration for Southwest Airlines ( LUV ). The Dallas-based airline company highlighted during its recent Q2 earnings call ( transcript ) that is has been "very pleased" with the Hawaii franchise overall. "Load factors are very high. Yields are improving. So we’re very, very happy with how Hawaii is performing," noted Chief Commercial Officer Ryan Green.

In the hotel REIT sector, Host Hotels & Resorts ( HST ) dropped 2.22% on Friday and closed at a six-week low. Of concern to investors, Host Hotels & Resorts ( HST ) has three hotels on Maui and Hawaii as a whole accounted for 11% of 2022 EBITDA. BMO Capital Markets analyst Ari Klein thinks visitor restrictions to Maui and airline cancellations will be a near-term disruption for earnings at a minimum. Host Hotels & Resorts ( HST ) has a clean sweep of consensus Buy ratings across Seeking Alpha analysts and Wall Street analysts. The Seeking Alpha Quant Rating is also flashing Buy.

In the utilities sector, Hawaiian Electric Industries ( HE ) shed 13.2% over the last week due to the impact of the wildfires on Maui. The company has warned affected customers to plan for extended outages, as access to many impacted areas is limited due to safety and emergency response concerns. The full extent of loss will not be known until officials can assess the damage from the flames. The drop in HE's share price pushed up the dividend yield to 4.44%.

More on the markets

• Seeking Alpha Quant Ratings across the airlines sector
• Seeking Alpha Quant Ratings across the hotel and resort REIT sector
• Seeking Alpha Quant Ratings across the utilities sector

For further details see: