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Avoid These 2 Recently Downgraded Airlines Stocks -Breaking

by Mike Robinson

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© Reuters. Here are 2 Stocks of Recently Downgraded Airlines Companies

Due to the increased restrictions and low air travel demand, the airlines sector has faced a decline in passenger numbers. We believe it would be prudent to stay away from airline stocks Southwest Airlines and Mesa Air (NYSE:). The stock looks overvalued. They have also been recently downgraded. Keep reading. Many airlines were forced to cut back on staff due to the severity of the COVID-19 pandemic. The economy is gradually recovering but demand for air travel may remain low because of the continued work-from home trend and the fact that people do business at their own homes, avoiding travel to business.

Recent reports about the new coronavirus type, Omicron, have caused the industry to experience a resurgence as governments revise entry regulations and implement restrictions at the border. A Kyodo report states that the combined loss for all airlines will be $12 billion in 2022. This is due to lower travel demand than pre-pandemic.

We think that it would be prudent to steer clear of airline stocks Southwest Airlines Co., Inc. (NASDAQ) and Mesa Air Group, Inc., (NASDAQ:). They have low growth prospects, and their valuations seem stretched at current prices. They have also been recently downgraded by analysts.

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