Following the Zhixun Finance APP, Hurricane Milton is expected to land in Florida on Wednesday night local time, with Morgan Stanley analysts assessing the potential impact of the hurricane on some leisure companies operating in Florida, while Jefferies emphasizes the impact of the hurricane on airlines.

Expected to hit the Gulf Coast of Florida later tonight, Milton is expected to become the most damaging hurricane in US history. According to PowerOutage, in the USA, over 0.174 million users in North Carolina, Georgia, Texas, Florida, and California have experienced power outages.

Leisure entertainment companies

Morgan Stanley on Wednesday inspected three companies operating in Florida - gym franchise operator Planet Fitness (PLNT.US), sports country club operator Life Time (LTH.US), and golf equipment manufacturer Topgolf Callaway Brands (MODG.US).

Morgan Stanley analysts led by Megan Alexander stated in a research report, "Overall, Planet Fitness appears to have the largest risk exposure within our coverage universe, particularly considering the concentration of the business in Florida. However, our analysis in collaboration with the AlphaWise team indicates that the current impact is limited, while substantial risk may arise in member trends and estimates, potentially requiring an extension of store closure time."

The impact on Planet Fitness is expected to be minimal, with only five locations in Florida and only one in Tampa (directly in the hurricane's path). For Topgolf Callaway Brands, it has four locations within 40 miles of the hurricane's projected path, all of which are currently closed, with the impact expected to be limited and not result in severe damage.

Airlines

Meanwhile, Jefferies evaluated the impact of Hurricane Milton on airlines on Tuesday. So far, the brokerage firm found that the flight schedules of ultra-low-cost airlines (ulcc) have been greatly affected considering the route network to Florida.

According to Jefferies, on Tuesday, Allegiant Travel (ALGT.US) had about 41% of its flights canceled, which jumped to 64% on Wednesday. In contrast, on Wednesday, this ratio for the private airline Breeze was 44%, for Spirit Airlines(SAVE.US) and Frontier Group(ULCC.US) was 18%, and for Southwest Airlines(LUV.US) was 11%.

In addition, airline network operators including American Airlines(AAL.US), Delta Air Lines(DAL.US), and United Airlines(UAL.US) canceled about 5% of flights on Wednesday.

Analysts led by Sheila Kahyaoglu at Jefferies Financial stated in a research report, "In 2022, Hurricane Ian (a Category 4 hurricane in Florida) caused airlines to cancel over 1,500 flights in the third and fourth quarters, resulting in a $75 million revenue loss for Delta Air Lines and a $40 million revenue loss for American Airlines in the last 4 days of September. In 2017, hurricanes Harvey (a Category 4 hurricane in Texas) and Irma (a Category 5 hurricane in Florida) caused airlines to cancel flights in Houston for 14 days, resulting in a $0.4 billion revenue loss for United Airlines and a profit margin impact of 1.5%."

The analysts added, "These hurricanes led to American Airlines canceling over 8,000 flights, affecting $75 million in pre-tax earnings, and impacting $0.12 billion in revenue for Delta Air Lines and $0.1 billion for Southwest Airlines."