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Airline stocks are a peculiar bunch in the stock market, and even more so during a time like the COVID-19 pandemic. It cannot be accurately predicted when air travel will return to pre-pandemic levels — but the situation can only improve. This in turn puts investors in a quandary with respect to finding the top airline stocks for the month of September.
Airline Stocks to Buy in September 2020
Yet, there are several opportunities here as airline stocks, besides others, are at bargain levels following the COVID-19 stock market crash. This gives savvy investors the potential to make a decent level of profit once business returns to normal.
Travel bans around the world had a devastating impact on the airline industry, but things are looking up. The question is, what stocks are the best to consider, and what is the outlook for Q4 2020?
After Berkshire Hathaway dumped airline stocks earlier this year, investors are naturally worried that it may be a bad investment. After all, experts have projected 2024 as the year when things return to normal. But times of crises hold the most opportunity when the market rebounds — so it is worth considering at the very least.
3 Top Airline Stocks Right Now
Listed here are a few anticipated airline stocks that appear to be good for growth in the months to come. These airlines are slowly beginning to pick itself back up, and there is hope that this will increase going forward.
1. JetBlue Airways Corporation (NASDAQ:JBLU)
Like all other airlines, JetBlue took a massive hit following the global lockdown, but in some respects, the future looks more optimistic when compared to competitors. The company has taken extensive measures to ensure safety on its flights, with UV sanitation. It also plans to offer more routes at the end of the year, which also bodes well for business.
Currently valued at $12.62, analysts have targeted a price of $16 in the medium-term and rated the stock a buy. This is far from its pre-pandemic valuations, but a return to those levels with the only form in the longer term.
2. Delta Air Lines, Inc. (NASDAQ:DAL)
Ranked 69th on the Fortune 500 and the second-largest airline by the number of scheduled passengers, Delta Airlines has also suffered a good deal at the hands of the pandemic. The company posted a pre-tax loss of $3.9 billion in Q2 and an adjusted loss per share of $4.43 on a revenue of $1.2 billion.
But given the scale of Delta’s operations, it is reasonable to expect a slow but steady transition into pre-pandemic levels of revenue. Analysts have rated Delta as a buy, especially in the short to medium-term. Upside growth has been estimated to be roughly 16% for the next 12 months.
3. Southwest Airlines (NASDAQ:LUV)
Southwest Airlines, the world’s largest low-cost carrier, is the United States’ largest domestic passenger airline. But no matter how popular an airline is, the pandemic has hit hard, and Southwest’s Q2 report showed a loss of $2.67 per share.
The upside is that Southwest is rather well-placed, as far as the numbers indicate. It has over $14 billion in cash and is ripe to take advantage of a rebound in the coming months. Pre-pandemic valuations of $50+ in the coming year have been suggested by analysts, but the real takeaway is that it shows room for growth at its current price.
Airline stocks are not as safe as gold or other investments at the moment. Some investors may prefer to stick to assets that serve as a good hedge. However, for those willing to keep aside some capital for stocks with good growth potential, it is worth examining.
As should always be the case, use only as much capital as is reasonable. The airline industry will slowly begin to recoup its losses, but there will be some volatility for the next 12 months. These stocks hold value for those investors who are willing to capitalize on medium-term opportunities.
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What is your opinion of investing in airline stocks at the moment? Does it look optimistic for the next 12 months or so? Let us know in the comments below.
Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.