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Why Azul (AZUL) Could Be Positioned for a Slump

Zacks Equity Research
Updated

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Azul SA AZUL, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in AZUL.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen three estimates moving down in the past 60 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $1.87 a share two months ago to its current level of $1.30.

Also, for the current quarter, Azul has seen one downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 25 cents a share from earnings of 5 cents over the past 60 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 15.2% in the past month.

AZUL SA Price and Consensus

AZUL SA Price and Consensus | AZUL SA Quote

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So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Transportation - Airline industry, you may instead consider a better-ranked stock - SkyWest, Inc. SKYW. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>


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SkyWest, Inc. (SKYW) : Free Stock Analysis Report
 
AZUL SA (AZUL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research