As if rising energy and crude prices weren't placing enough pressure on airline stocks lately, U.S. Airways was broadsided by a brokerage downgrade today. Goldman Sachs dropped LCC to neutral from buy, citing that rising U.S. macro pressure will make fuel headwinds harder for [US Airways] to offset, especially with less international flying vs. peers. At last check, LCC was lower by about 3.5%, while the Amex Airline Index (XAL) was off by about 2.7%.
Analyst ratings are the 1 weak spot in LCC's sentiment backdrop, as the rest of the investing public has long been bearish on the shares. For instance, nearly 8% of the stock's float is sold short and its Schaeffer's put/call open interest ratio (SOIR) of 0.59 ranks above 64% of all those taken during the past year. However, Zacks reports that 6 of the 8 analysts following the stock rate it a buy or better. With energy prices continuing to advance, and rumors of U.S. economic trouble, LCC could be the victim of additional downgrades form this bullish bunch.