Next week, aviation stocks will release their financial reports and Bank of America prefers these companies.

Next week, many airline stocks will release their financial reports. Prior to this, Bank of America Corp released a report stating that due to premium income, a rebound in business travel, and the growth of Atlantic China Welding Consumables, Inc. routes, the performance of network airlines will continue to outperform other airlines. The bank also emphasized that domestic capacity in the United States has decreased compared to a year ago, which will bring strong unit revenue improvement for some airlines. Bank of America Corp maintains its "buy" rating for Air Canada (ACDVF.US), Alaska Air Group, Inc. (ALK.US), Delta Air Lines, Inc. (DAL.US), and United Airlines Holdings, Inc. (UAL.US). Network airlines refer to airlines with extensive route networks and strong flight connectivity capabilities. They typically have a large number of flights and destinations globally or in specific regions, providing diverse flight choices and convenient connecting services. Major network airlines in the United States include Delta Air Lines, Inc., American Airlines Group Inc. (AAL.US), and United Airlines Holdings, Inc. Bank of America Corp has upgraded its stock rating for American Airlines Group Inc. from "underperform" to "neutral". The bank believes that American Airlines Group Inc. will benefit from the strong trends mentioned in Delta Air Lines, Inc.'s performance report last week, including robust growth in premium income, recovery in business travel, and growth of Atlantic China Welding Consumables, Inc. routes. Analyst Andrew Didora stated: "Although we expect the Atlantic China Welding Consumables, Inc. routes to only account for 13% of the airline's passenger revenue, compared to over 20% for Delta Air Lines, Inc. and United Airlines, considering the market share losses for American Airlines Group Inc. in the first half of 2024, the company may gain significant benefits from the recovery in business travel." Bank of America Corp has also adjusted its ratings for some airlines. Bank of America Corp has downgraded its stock rating for Southwest Airlines Co. (LUV.US) from "neutral" to "underperform". The bank believes that Southwest Airlines Co.'s profitability remains weak. Analyst Andrew Didora and his team's forecasts are at the lower end of Southwest Airlines Co.'s long-term profit margin target. The analyst pointed out that the current valuation of Southwest Airlines Co. does not fully consider industry changes post-pandemic, such as a shift towards higher premiums, corporatization, internationalization, and cost/profit risks related to changes in Southwest Airlines Co.'s business model. Bank of America Corp also downgraded its stock rating for JetBlue Airways Corporation (JBLU.US) to "underperform". Analyst Andrew Didora stated: "Due to the weak profitability, our forecast for JetBlue Airways Corporation's 2025 EBITDAR (representing earnings before interest, taxes, depreciation and amortization plus other non-recurring income or minus other non-recurring expenses) is about 30% lower than in 2019. We find it difficult to prove that the current valuation is reasonable." The analyst noted that JetBlue Airways Corporation's previous valuation was around 5 to 7 times annual EBITDAR, while the current valuation is over 8 times the expected 2025 EBITDAR.