By Callum Keown
United, Delta and other airline stocks were flying early Wednesday as the sector finally put the Iran war in its wake.
The largest U.S. carriers have navigated the turbulence effectively by hiking airfares to mitigate the impact of surging fuel costs. Demand for travel has remained insatiable despite the higher ticket prices, earnings season revealed.
But with oil prices slumping in recent days and sinking toward $90 a barrel Wednesday, the sector looks set to finally erase its wartime losses.
The U.S. Global JETS exchange-traded fund, which tracks the performance of airline stocks, jumped 3.3% in early trading and was on track to close above its pre-war, Feb. 27 level for the first time since the conflict started. The ETF is up 15% in May -- exactly mirroring Brent crude's 15% drop over the same periodand is having its best five-day stretch since November 2020.
United Airlines was leading the sector higher, rising 6%, entering positive territory for the year and also on track for its first close above its Feb. 27 price since the war began. Delta Air Lines rose 5% and is up 20% for the year.
"Strong pricing data, encouraging checks, and easing spot fuel prices have us bullish on United, Delta and American Airlines relative to the peer group," TD Cowen analyst Tom Fitzgerald wrote Wednesday as he hiked his price target on six airlines, also including Southwest, Alaska and JetBlue.
His $150 price target on United implies 32% upside to Wednesday's early price, while he sees American rising 31% to $20 and Delta rising another 10% to $92.
"Events could change on a dime, but as of now, we are cautiously optimistic that the big 3 airlines are tracking near the high end of 2Q guidance and poised for positive 2H26 revisions," he added.
Cruise stocks, another beaten down sector since the conflict began, were also climbing. Royal Caribbean rose 4% to sneak into the green for 2026, while Carnival was up 5% and Norwegian Cruise Line Holdings jumped 6.6%.
Write to Callum Keown at callum.keown@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 27, 2026 11:09 ET (15:09 GMT)
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