Industrials

Report by Asterisk Advisors

ALK reported operating results that might have been in line with the consensus forecast but they were nonetheless comparatively extremely poor. The 3.7% 2Q26 EBITDA margin was nowhere near the margin reported by Delta and United. The further deterioration in the cash operating margin indicates an inability to turn around Hawaiian’s operations. While not a complete surprise, the fact that a year and a half into the merger ALK has not achieved any operating progress whatsoever in this regard is worrisome. Reno Bianchi fears Hawaiian might drag ALK into financial despair. The airline has plenty of liquidity to confront the crisis but the harsh reality is that it is nowhere near as strong a credit as it used to be; it is now a very weak credit financially. Reno does not think its fixed income trading levels accurately reflect this reality.

Consumer Staples

Report by Smart Insider

Three Non-Executive Directors recently purchased a combined £646,000 of shares at an equivalent price of c.£42 per share, with some transactions conducted through ADRs. Notably, each purchase was their first. Ruby Lu, a Non-Executive since Nov 2021, acquired £374,392 of shares, despite never having bought shares at Yum China, where she has served as a Non-Executive Director since 2016. Judith McKenna, a Non-Executive since Mar 2024, purchased £186,000, having made no purchases while an executive at Walmart or since joining Delta Air Lines as a Non-Executive in 2025. Benoit Potier, a Non-Executive since Jan 2025, acquired £87,000. Smart Insider views the cluster of buys as bullish and ranks the stock +1, their highest rating.

Report by CHA-AM Advisors

In the latest edition of David Scott’s A Strategist’s Diary, he argues that the jet-fuel panic has become an “ex-crisis”, with investors too quick to extrapolate higher fuel prices into a broader inflation problem. Instead, he sees demand destruction, airline fare discounting and rising supply from the US and China as evidence that the shock is already mean reverting. The investment implication is contrarian: sectors he would normally avoid, including airlines and state-owned Chinese oil/refining names, now offer compelling valuations. David highlights PetroChina and CNOOC as surprisingly well-run and still cheap despite strong prior returns, while also finding opportunities across global airlines including Spring Airlines, Delta, Ryanair, Eva Airways, IAG and IndiGo.

Industrials

Report by Asterisk Advisors

Reno Bianchi offers incisive commentary on key developments across the aviation sector. Highlights from his report this week include Delta’s strategic push towards AI-driven pricing, persistent capacity constraints from Pratt & Whitney engine issues and the latest fallout from the EU-US aerospace tariff standoff. In credit, short-dated EETCs like UAL B 4.6% due 2026 imply spreads near 1,000bps and offer compelling value if sourced at quoted levels. For AA tranches, Reno recommends 5yr paper with spreads ≥130bps; for A tranches, selected issues offering +200bps or more. He continues to favour Spirit’s 2015-1 B tranche. Term loans and senior secureds remain expensive, with Spirit and JetBlue as notable but risky exceptions. Domestic unsecureds are best avoided on tight spreads. LATAM remains his his preferred international credit, citing low leverage and relative upside.

Industrials

Report by Cmind

Cmind expects LUV is very likely to miss its Q2 earnings, scheduled for release on 27th July - their latest prediction shows that the probability of beating the consensus is 0.25. Comparing LUV against its peers (Delta Air lines, United Airlines and American Airlines) they find that the ratio Cash/Operating Profit of LUV exceeds 75 percentile and Receivables - Estimated Doubtful is below 25 percentile of the same metrics of its peers. In addition, linguistic signals indicate excessive CEO evasiveness, and CFO and analysts bullishness from earnings transcripts. Finally, LUV has missed its targets in the past two quarters.