Delta Air Lines Bombardier CRJ 200 aircraft as seen flying on final approach for landing in New York ... [+] JFK John F. Kennedy International Airport. The airplane type is changed to Mitsubishi CRJ-200LR as Mitshubishi purchased the specific division from Bombardier. The specific airplane is also operated by Endeavor Air that is an American regional airline that operates as Delta Connection for Delta Air Lines. The registration of this regional plane is N8894A and is powered by 2x GE CF34 jet engines. Delta Airlines is the second-largest in the world, member of SkyTeam aviation alliance with headquarters in Atlanta, Georgia. NY, USA on February 2020 (Photo by Nicolas Economou/NurPhoto via Getty Images)NurPhoto via Getty Images
Delta Air Lines, Inc DAL . just reported earnings and the stock is setting up to take-off. In Q4 2020, the company reported a loss of $2.53 per share on revenue near $4.0 billion. The Street was looking for a loss of $2.43 per share on revenue of $3.7 billion. Revenue fell 65.3% compared to Q4 2019.
Looking forward, the company said it expects Q1 2021 revenue of $3.01 billion to $3.44 billion. That is lower than the Street’s forecast for revenue of $4.46 billion in Q1 2021.
A Closer Look At The Stock: 2 Reasons Why Delta’s Stock Is Ready To Fly
Fundamentally, most people will agree that Delta, and other airline stocks, are undervalued right now as they are still trading at cheap levels due to lower Covid-19 related travel demand. The stock hit a 52-week high of $62.48/share and is currently trading near $41/share. The market cap is $25.796 billion and that is lower than where it was in Q1 last year.
Technically, the stock is building a new base as it is trading in a very tight range near it’s 50 day moving average line. Usually, chart readers, like to see a stock trade in a tight range and they like to wait for a big rally on heavy volume above the highs of the current trading area. If the stock can trade above $43.76 on heavy volume that will trigger a new “breakout” and that will likely lead many momentum traders into the stock.
There are many reasons savvy investors will be interested in watching airline stocks and other beaten down areas of the market for a potential “back to normal” trade. Eventually, we will get “back to normal” and when that happens, airline and other travel related stocks will likely take off.