SkyWest SKYW benefits from an uptick in air travel demand (particularly on the leisure front). The upsurge in passenger volumes and fleet-modernization efforts make the SKYW stock an attractive investment opportunity currently.

Let us delve deep to unearth the factors working in favor of this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here. 

SKYW’s Growth Projections & Surprise History: The Zacks Consensus Estimate for the current and the next-year earnings has been revised upward by 4.1% and 7.1%, respectively, in the past 60 days. Such favorable estimate revisions indicate brokers’ confidence in the stock.

Given the wealth of information brokers have at their disposal, investors should be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.

The Zacks Consensus Estimate for the current and the next-year earnings have seen growth of 829.8% and 16.6%, respectively, on a year-over-year basis. The company has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters. The average beat is 79.1%.

SKYW’s Robust Price Performance: The company’s price trend reveals that its shares have gained 97.8% in the past year, surpassing the industry’s 30.4% growth.

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Tailwinds for SKYW: SkyWest, founded in 1972, is based in St. George and operates regional jets for major U.S. airlines. SKYW’S track record of successfully meeting the requirements of each of its airline heavyweight partners bodes well for the company.

Production delays at Boeing BA hurt the fleet-related plans of airline heavyweights in the United States. However, this supply-chain mess worked in favor of SKYW and improved its pilot-staffing scenario. Boeing-led woes hit large airlines’ growth plans, increasing prospects of them being over-staffed. Many airline majors have now paused/slowed pilot hiring. As a result, the migration of employees from regional to mainline airlines has slowed, raising the chances of some employees even returning to regional airlines like SKYW from major airlines to save their jobs. This scenario is likely to improve SKYW’s fleet utilization and, in turn, boost revenues.
 
Another favorable aspect, owing to Boeing’s production problem, is that the demand for SKYW’s older aircraft is higher as major airlines are looking to boost capacity to match the buoyant air travel demand scenario. SKYW’s balance sheet also looks solid and is likely to gain in strength going forward.  Lower capital expenditure is likely to support SKYW’s free cash flow profile, in turn boosting its shareholder returns.

Bullish Industry Rank: The industry to which SKYW belongs currently has a Zacks Industry Rank of 29 (out of 249). Such a favorable rank places it in the top 12% of Zacks Industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative.

Another Stock to Consider

Investors interested in the Zacks Transportation sector may also consider The Greenbrier Companies GBX, currently sporting a Zacks Rank #1.

Greenbrierdesigns, manufactures and markets railroad freight car equipment in North America, Europe and South America. The company is headquartered in Lake Oswego, OR.

GBX presently has a Growth Scoreof A. It has a market capitalization of $1.96 billion. The Zacks Consensus Estimate for GBX’s 2025 earnings has improved 11% in the past 90 days. GBX has an expected earnings growth rate of 6.7% for 2025.

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The Boeing Company (BA) : Free Stock Analysis Report

SkyWest, Inc. (SKYW) : Free Stock Analysis Report

Greenbrier Companies, Inc. (The) (GBX) : Free Stock Analysis Report

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