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Investing.com -- The airline sector presents varied investment opportunities with some carriers showing stronger potential than others, according to recent analysis from Investing.com WarrenAI using Investing Pro’s metrics including Fair Value, Pro score, technicals, and analyst price targets.
United Airlines emerges as the top performer in the sector, while other major carriers show mixed signals across various evaluation metrics. Here’s how the top five airline stocks currently rank:
1. United Airlines stands out with the most bullish outlook, boasting the highest analyst upside potential at 22.6% and the strongest 1-year return in the sector. Technical indicators strongly confirm this bullish trend, with robust weekly Buy signals and all major moving averages pointing upward. While the stock shows overbought conditions, no reversal signals have appeared yet. Investors should note that Pro Fair Value analysis flags a potential overvaluation risk of 12.1%.
United Airlines reported record revenue of $15.2 billion for the second quarter of 2025, a 1.7% increase from the prior year, with earnings per share of $3.87.
2. Alaska Airlines claims the second position with impressive Fair Value upside potential of 19.4%, backed by strong fundamentals and improving technical indicators. The carrier shows particularly strong buy signals across both weekly and monthly timeframes, suggesting momentum could accelerate if the stock successfully breaks through current resistance levels.
In recent developments, Alaska Airlines announced new nonstop services to Seoul and Reykjavík. Separately, Evercore ISI lowered its price target on the company to $65, citing cost pressures.
3. Delta Airlines secures the third spot with a strong Pro Score and consistent analyst support. Technical analysis reveals strong buy signals on weekly and monthly charts, though day-to-day technical indicators suggest more caution. While Delta demonstrates solid performance, its upside potential appears more limited compared to the top two contenders.
Delta Air Lines has clarified that it will not use artificial intelligence for personalized ticket pricing, following concerns raised by U.S. lawmakers.
4. American Airlines ranks fourth with Pro analysis indicating 13.4% upside potential. However, analyst consensus remains lukewarm with only 3.3% projected upside. Technical indicators raise concerns, showing Strong Sell signals on daily charts and Sell ratings on weekly timeframes, suggesting risk of further downside movement.
Jefferies maintained its Hold rating on American Airlines but lowered its earnings per share estimates for the third and fourth quarters of 2025.
5. Southwest Airlines rounds out the top five with modest upside potential of 5.8% according to Pro Fair Value metrics. The carrier faces execution risk related to its new strategy implementation. Technical analysis shows a neutral overall position with some positive momentum indicators, though no clear trend has yet emerged.
Southwest Airlines sold its renewable fuels unit to Conestoga Energy and received a price target increase to $42 from Raymond James. The company also declared a quarterly dividend of $0.18 per share.
These rankings provide a snapshot of current airline sector positioning based on multiple evaluation metrics, with United and Alaska Airlines demonstrating the strongest combined fundamentals and technical indicators among major U.S. carriers.
For a deeper dive into the airline sector or other sectors, ask WarrenAI for free: https://www.investing.com/warrenai
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