3 Airline Stocks Wall Street Predicts Could Rally by 35% or More

Most airline companies reported strong earnings in their last reported quarter thanks to a decent uptick in demand for leisure travel and improvement in corporate travel bookings. Although governments in several countries have…

reinstated pandemic restrictions with the recent surge in COVID-19 Delta variant infections, the Transportation Security Administration has screened an average of nearly two billion people over the past seven days at  U.S. airports. Also, last month, executives said that international travel has started to recover after remaining largely missing from airlines’ rebound.

Furthermore, solid progress on the vaccination front and increasing disposable income will likely help the industry recover faster. In fact, the global airline industry is expected to reach $744 billion by 2026, registering a 12.7% CAGR.

Hence, Wall Street analysts expect prominent airline stocks Delta Airlines Inc. (DAL – Get Rating), Alaska Air Group Inc. (ALK – Get Rating), and Allegiant Travel Company (ALGT – Get Rating) to rally by more than 35% in price in the coming months.

Delta Airlines Inc. (DAL – Get Rating)

DAL operates scheduled passenger and freight flights across the United States and worldwide. Airline and Refinery are the two operational segments of the  Atlanta, Ga.-based company. In addition, the company offers third-party customers vacation packages, aircraft charters, aircraft maintenance, repair, and overhaul services.

Last month, DAL announced that it had begun an offer to purchase its outstanding debt for cash up to a maximum of $1.0 billion, excluding accrued and unpaid interest. This decision exhibits the company’s robust financial health.

DAL’s revenue came in at $7.13 billion in the second quarter, ended June 30, 2021. Its cash & cash equivalents grew 278.28% from their year-ago value to $11.46 billion. The company reported $652 million in net income, while its EPS amounted to $1.02 over this period.

DAL’s EPS is expected to increase 64.9% in the current year. A $27.32 billion consensus revenue estimate for its fiscal year 2021 represents a 59.8% increase from the same period last year. The stock has gained 44.6% over the past year and 6.9% over the past nine months.

Of the 14 Wall Street analysts that have provided ratings for the stock,11 rated it Buy, and three rated it a Hold. Closing yesterday’s trading session at $40.46, the average analyst price target of $57.69 represents a potential 42.6% upside.

Alaska Air Group Inc. (ALK – Get Rating)

ALK provides passenger and freight air transportation services through its subsidiaries. Mainline; Regional; and Horizon are the three segments of the company. The Seattle, Wash.-based company operates in more than 115 locations across the United States and North America.

Last month, ALK renewed and expanded its SabreSonic passenger service system partnership with SABR, the premier software and technology supplier that powers the worldwide travel industry. This move should…

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