DAL) has enough cash to survive deep into next year. That’s why investors have been nibbling on DAL stock since early August. The shares bottomed below $25 but open for trade Sept. 11 at over $32 per share. That’s a market cap of about $20.3 billion, 42% of last year’s sales.” data-reactid=”12″>Delta Air Lines (NYSE:DAL) has enough cash to survive deep into next year. That’s why investors have been nibbling on DAL stock since early August. The shares bottomed below $25 but open for trade Sept. 11 at over $32 per share. That’s a market cap of about $20.3 billion, 42% of last year’s sales.
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$2.96 per share, roughly $1.9 billion, when the airline reports Oct. 13, this means it should have enough cash to clear the pandemic dive.
aren’t doing, however, is backing that assumption up with cash.
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Why Delta and DAL Stock
AXP) as a “gold standard” in loyalty programs. Cardholders are still using the cards, accumulating frequent flyer miles. That could mean huge pent-up demand once the pandemic is over.” data-reactid=”33″>Analysts are looking to Delta first because they like its COVID-19 strategy, which includes disinfecting planes between each flight and clear communications with passengers. They also see Delta’s SkyMiles arrangement with American Express (NYSE:AXP) as a “gold standard” in loyalty programs. Cardholders are still using the cards, accumulating frequent flyer miles. That could mean huge pent-up demand once the pandemic is over.
Transportation Security Administration’s (TSA) “throughput” numbers. This is the number of passengers going through airport security screenings each day, updated at 9 a.m. the following day.
For Sept. 9, this was 616,983, about 31% of the previous year’s figure. The number has been as high as 968,673 over the Labor Day holiday. But investors like Mark Tepper of Strategic Wealth Partners want to see something like 1.5 million, or 75% of normal traffic, before they jump into the space.
“We’re gradually learning to live with Covid-19,” he writes, and Delta’s reputation is the best in the industry.” data-reactid=”38″>This means investors willing to take a risk can get into the new industry ahead of the big boys. Our Matt McCall says that’s a speculation worth making. “We’re gradually learning to live with Covid-19,” he writes, and Delta’s reputation is the best in the industry.
MS) has already pushed its cards in, giving Delta an “overweight” rating with a $50/share price target.” data-reactid=”39″>Morgan Stanley (NYSE:MS) has already pushed its cards in, giving Delta an “overweight” rating with a $50/share price target.
The Waiting Game
Delta is among them.
furlough nearly 2,000 pilots starting next month. About 1,800 had signed up for early retirement starting this month. What Delta calls “creative staffing options” have avoided flight attendant furloughs for the coming quarter.
$3.1 billion. That’s double the lockdown quarter revenue of $1.4 billion. The average estimate for the December quarter is $4.8 billion. Revenue of $30 billion is expected next year. In 2019, Delta’s revenue was over $47 billion.
are saying sell Delta stock today. Their average one-year price target is $39/share, a 20% advance.
The Bottom Line
When blue skies do approach, however, this stock is going to fly. That makes it a great opportunity for investors with a five-year time horizon. You can buy it here, wait for the big boys to pile in, and probably see a fat profit.
AAL) and United Airlines (NYSE:UAL) into bankruptcy, Delta shares will do even better. It sets up as a reasonable speculation, so long as you’re not betting this year’s retirement on it.” data-reactid=”49″>There remain risks, but if those risks force weaker players like American Airlines (NYSE:AAL) and United Airlines (NYSE:UAL) into bankruptcy, Delta shares will do even better. It sets up as a reasonable speculation, so long as you’re not betting this year’s retirement on it.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O’Flynn and the Bear, available at the Amazon Kindle store. Write him at [email protected] or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.
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