DAL - Delta Air Lines, Inc.
Chart Events
Performance Outlook
- Short Term2W - 6W
- Mid Term6W - 9M
- Long Term9M+
| Previous Close | 25.21 |
| Open | 25.33 |
| Bid | 26.34 x 900 |
| Ask | 26.35 x 2200 |
| Day's Range | 25.09 - 26.76 |
| 52 Week Range | 17.51 - 63.44 |
| Volume | 33,547,088 |
| Avg. Volume | 53,136,149 |
| Market Cap | 16.791B |
| Beta (5Y Monthly) | 1.27 |
| PE Ratio (TTM) | 4.85 |
| EPS (TTM) | 5.43 |
| Earnings Date | Jul 09, 2020 - Jul 13, 2020 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | Feb 19, 2020 |
| 1y Target Est | 37.07 |
- Investor's Business Daily
Airline Stocks Rally As Delta Tries To Reshuffle Pilots After Cuts Elsewhere
Delta Air Lines and its pilots union are reportedly trying to avoid furloughs for around 2,300 pilots while reassigning thousands of others.
- Reuters
Delta, union working to avoid furloughs of 2,300 pilots
Delta said this month that it would have more pilots than needed as it reduces its network and fleet due to a drop in demand from the COVID-19 pandemic, but is working to avoid involuntary furloughs. Following the results on Sunday of a so-called "surplus" bid in which employees were asked to petition available positions at one of Delta's seven U.S. pilot bases, the airline will be shifting around 7,000 pilots to different locations or aircraft types, while 2,327 have not been assigned to any category, Delta's Master Executive Council (MEC) of the Air Line Pilots Association (ALPA) said in a statement. Delta confirmed the release of the results of the bid "to better align our staffing with our future flying demand" and said it is "looking at all options to mitigate or minimize furloughs and will continue working with ALPA in the coming weeks to explore those options."
- Benzinga
Barron's Picks And Pans: Cheniere Energy, Delta Air Lines, Extended Stay And More
* This weekend's Barron's cover story offers some stocks poised to rebound as the economy reopens. * Other featured articles look at why now is a good time to buy insurance stocks, and who wins as Americans take to the roads again. * Also, the prospects for a senior-living stock, cruise and hotel stocks with a difference, and more.Cover story "7 Travel Stocks Set for Success as Lockdowns End" by Avi Salzman shows why, despite the recession, Americans are about to hit the road. Now is the time to find deals in the likes of Delta Air Lines, Inc. (NYSE: DAL) and Las Vegas Sands Corp. (NYSE: LVS).Avi Salzman's "A Senior-Living Stock That Should Age Well" suggests that with manageable debt and a seemingly safe dividend, Caretrust REIT Inc (NASDAQ: CTRE) looks like a standout in a corner of the real estate industry that has growth potential.In "Yes, Now Is a Good Time to Buy Insurance Stocks," Al Root points out that shares of property and casualty insurers such as Hartford Financial Services Group Inc (NYSE: HIG) typically rally after catastrophic events as the industry raises its rates.Lindblad Expeditions Holdings Inc (NASDAQ: LIND) not only has a loyal and relatively wealthy customer base, but it faces lighter logistical challenges than its bigger cruise line rivals. So says "Why This Small, Elite Cruise Operator Could Weather the Coronavirus Storm" by Alexandra Scaggs.In Daren Fonda's "3 Airline Stocks That Can Benefit From a Pickup in Domestic Travel," see why Americans are more likely to book domestic, short-haul leisure trips, rather than business and international flights. What does that mean for Southwest Airlines Co (NYSE: LUV) and others?See Also: 'Price Is Truth': Analyzing Stock Chart Performance Using Technicals"Hotel Stocks Have Been Hit Hard. Why Extended Stay Is Different" by Carleton English examines why, unlike other hotel chains, Extended Stay America Inc (NASDAQ: STAY), has not had to make radical changes to its operations.Driving is rebounding as the economy reopens and Americans take to their cars, according to Andrew Bary's "Americans Are Getting Back on the Road. 3 Stocks to Buy." That looks bullish for Marathon Petroleum Corp (NYSE: MPC) and others.In "Buy This Energy Company. It Raised Its Dividend Twice This Year," Avi Salzman discusses why, thanks to long-term contracts for liquefied natural gas, Cheniere Energy Partners LP (NYSE: CQP) offers safety that is unusual for such a challenged sector.Also in this week's Barron's: * Concerns arising from the president's feud with Twitter * Why the U.S. probably will prevail over China in the long run * Why NASA would be a huge aerospace player as a stock * The most dangerous sectors for dividend investorsSee more from Benzinga * Notable Insider Buys: Avis, Dynavax And Formula One * Benzinga's Bulls And Bears Of The Week: Amazon, Disney, Netflix And More * Notable Insider Buys This Past Week: Berkshire Hathaway, Sysco And More(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
- GuruFocus.com
Warren Buffett: Know When to Cut Your Losses
Bad businesses usually can’t be rescued by good managers Continue reading...
- Motley Fool
Delta Working with Pilots Aiming to Avoid Layoffs, Says Report
The airline updated its plans for additional summer routes, but still has more pilots than it will need looking ahead to 2021.
- Zacks
United Airlines to Cut 13 Officer Roles Amid COVID-19 Woes
United Airlines'(UAL) job cuts are part of its cost-cutting measures. The carrier had earlier warned of a 30% reduction in its administrative staff.
- TheStreet.com
Delta and Pilots Union Work to Avoid Furloughs
Delta Air Lines and its pilots union said they were working to avoid furloughs of roughly 2,300 pilots as the carrier contends with a drop in demand due to the coronavirus shutdown. Shares of the Atlanta-based company were up 1.7% to $25.63 in premarket trading Monday. Delta will shift around 7,000 pilots to different locations or aircraft types, while 2,327 have not been assigned to any category, Delta's Master Executive Council of the Air Line Pilots Association (ALPA) said in a statement.
- Barrons.com
Airline Stocks Still Have Far to Go. Here Are 3 That Can Benefit From a Pickup in Domestic Travel.
Travelers are more likely to book domestic, short-haul leisure trips, rather than business and international flights
- Barrons.com
Ride the Travel Rebound With 7 Less Risky Stocks
The economy is in a recession, but Americans are about to hit the road. Now is the time to find deals in a battered industry.
- Zacks
Delta Air Lines (DAL) Stock Sinks As Market Gains: What You Should Know
Delta Air Lines (DAL) closed the most recent trading day at $25.21, moving -1.75% from the previous trading session.
- Zacks
Should You Buy Airline Stocks & ETF Upon Takeoff?
The Airline ETF has seen enormous investor interest of late, find out why.
- InvestorPlace
Delta Stock Could Lead an Airline Rally
Delta Air Lines (NYSE:DAL) and other carriers aren't out of the novel coronavirus woods yet, not by a long shot. But a jump of 18.24% last week by DAL stock can't be glossed over either.Source: NextNewMedia / Shutterstock.com The recent strength of DAL stock epitomizes what's happening in the equity market today. Stocks, including many of the biggest decliners during the March Covid-19 swoon, are rallying against a backdrop of rising unemployment and other bleak economic data.Airlines, which remain contrarian bets, are late to the trash-to-treasure rally. That could be a sign that the group and DAL stock can climb further going forward.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the sector's outlook is still troubling. Sure, Memorial Day weekend proved that Americans are eager to get out of the house, but that doesn't mean they're eager to resume taking the type of trips that require air travel.The airlines are not acting as though this is the case. The industry furloughed or laid off tens of thousands of workers. Planes are being grounded and smaller, less profitable routes are being scrapped. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure Weak economic data and the contention by analysts that demand for flights could take several years to return to 2019 levels aren't new. But the sector's recent rebound may indicate that investors think that the darkest clouds hanging over the airlines are gone. Delta Faces Challenges But Offers Potential RewardsIt's easy to be bearish son airlines when famed investors such as Warren Buffet abandon the group. Earlier this month, Buffett announced that he had sold all of his airline stocks. But negative investor sentiment isn't the only challenge that Delta and its rivals currently face.In the wake of the coronavirus, geopolitical tensions between the U.S. and China are again running high, with the White House accusing Beijing of blocking flights from American carriers, including Delta and United Airlines (NASAQ:UAL).The Buffet banishment is likely baked into Delta's shares at this point, but his skepticism doesn't mean Delta should be abandoned. The airlines is taking some steps to deal with the rough operating environment. Beyond the aforementioned headcount and route reductions, Delta is selling some planes and leasing them back in an effort to generate cash.That move, known as sale-leaseback, isn't exactly innovative. It's used in other industries when companies want to lighten their asset burdens while raising capital. It's generally well-received by Wall Street.As for well-known investors, not all of them are throwing in the towel on airlines. Bill Miller, the founder and CIO of Miller Value Partners, said earlier this month that betting against airlines is akin to betting against the success of a Covid-19 vaccine. Miller is putting money where his mouth is, as his firm holds stakes in Delta, United and American Airlines (NASDAQ:AAL). The Bottom Line on DAL StockCrises are not ideal times to buy airline equities. History proves that, but history also shows the group is battle-hardened and often rebounds strongly when the worst news passes.Over the past four decades, passenger "growth slowed during economic downturns, but then quickly recover{ed}. In 2018, the most recent year of data, the number of people who traveled at least once by plane hit an incredible 4.3 billion," said U.S. Global Investors.One caveat for investors with Delta or any other airlines for that matter: while many analysts are forecasting capacity levels returning to 2019 levels in 2023 or 2024, normalization could start as soon as next year. That means that investors who are evaluating Delta can only contemplate their options for so long. Also, it's important to remember that the stock is already significantly undervalued in the eyes of some.Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Delta Stock Could Lead an Airline Rally appeared first on InvestorPlace.
- Bloomberg
Airlines Leave $29 Billion Aid Fund Untapped in Bet on Rebound
(Bloomberg) -- U.S. airlines have yet to tap $29 billion in federal pandemic relief loans as they wait to see whether the reopening of the economy revives demand and diminishes the need for money that comes with government strings attached.Although the four largest U.S. passenger airlines have applied for the Treasury Department program, only American Airlines Group Inc. has said it intends to tap the pool of funds. Southwest Airlines Co., United Airlines Holdings and Delta Air Lines Inc. say they plan to wait until fall before deciding whether to take the money -- after a summer travel season that could see more people return to the skies.The wait-and-see approach illustrates how airlines are preparing for an uncertain future amid early signs of a recovery after Americans all but stopped flying in April due to the coronavirus and travel restrictions. A second wave of infections could make the situation worse.It also highlights how only a small portion of hundreds of billions of dollars available to the Treasury Department has actually been doled out to help companies.“That pool of money is designed as backstop financing and for those who can’t raise money elsewhere,” said Helane Becker, an analyst at Cowen & Co. in New York.U.S. airlines have separately raised billions in capital through methods including secured loans, bond offerings and equity sales, and Becker said that the federal loans are a last resort. The government loans would impose restrictions such as a cap on executive compensation and require carriers to offer equity or other financial stakes to the government in exchange for the aid.“The hope is that by September, the worst of the pandemic is behind us and people will be booking for travel in the fall and the holidays, and airlines won’t need to take the money,” Becker said.A Treasury Department spokeswoman declined to comment on the number of loan applications received and when the money would be distributed. The department has separately disbursed $25 billion from its payroll support program. Airlines accepting the funds, which are a mix of grants and loans, are required to refrain from layoffs until after Sept. 30.Airlines have pointed to signs that travel demand is beginning to perk up in recent weeks, fueling hopes that the stress on beleaguered carriers could begin to wane. Passengers taking flights over Memorial Day weekend, an early test of consumer confidence and the unofficial start of the summer travel season, reached levels unseen since late March. Airlines say bookings are outpacing cancellations, and airplanes that have been almost empty are starting to fill up.Carriers are far from out of the woods, however. The aviation industry’s recovery from the coronavirus outbreak will be long and slow, with global passenger numbers likely to stay below pre-pandemic levels through 2023, according to S&P Global Ratings, which warned of more rating downgrades for airports over the next few months.Although 321,776 people passed through security at U.S. airports on Thursday in one of the busiest days since late March, that’s still an 87% decline from the equivalent day last year, according to the U.S. Transportation Security Administration. Airlines have openly discussed the likely need to shed thousands of workers after a prohibition on job cuts tied to the payroll support program expires.On Thursday, for example, American Airlines announced plans to shed 30% of its management and support staff to align its operations with dramatic declines in travel.“While I don’t want to get into specifics, we continue to have very productive conversations with Treasury Department and its advisers,” American Airlines President Robert Isom said at an industry conference May 19. “Treasury has been nothing but fantastic to work with through these unprecedented times, and we remain very confident that we will move forward with this loan in a prudent and efficient manner.”Delta, SouthwestThe Treasury Department launched the loan program April 8, and has made no further announcements since it closed on April 17. The agency is weighing whether it will disburse the money in one or several tranches as the outlook for the industry’s recovery becomes clear, a person familiar with the matter said. The program may also evolve as Treasury Secretary Steven Mnuchin hasn’t settled on the details, the person said.Delta has applied for the additional Treasury loan “to hold our place in line,” Chief Financial Officer Paul Jacobson said at the same Wolfe Research conference. “We have until September to make a decision about that as well as other financing sources should we need them.”“We’ve applied for it,” Southwest Chief Executive Officer Gary Kelly said of the potential $2.8 billion loan at the carrier’s annual shareholder meeting May 21. “We’ve not committed to take that money and we have until September 30 to make that decision.”The airline loan program is yet another piece of the pandemic rescue funds enacted on March 27 -- when Congress and the White House were so panicked that Covid-19 would ravage the U.S. economy that they quickly came together -- that may not be working as designed.Virus RescueMnuchin has only used $37.5 billion out of a $454 billion fund to backstop central bank emergency lending, though $195 billion has been committed for use. A Main Street lending facility that Congress asked the Federal Reserve to launch to support small and medium-sized companies is still not operational even as businesses lay off workers, shutter and eye bankruptcy. The Paycheck Protection Program for smaller companies has been riddled with glitches, and now needs to be fixed to extend the relief.Mnuchin also hasn’t disbursed a $17 billion pot of money reserved for companies deemed critical to national security. The largest expected recipient, Boeing Co., got help from private investors. For the hundreds of thousands of other defense contractors in the Pentagon’s supply chain, Treasury’s criteria is too strict to qualify.The loan packages for airlines and companies critical to national security, if untapped, can be used to backstop additional lending by the Fed.“With a lot of these programs it turns out they’re not for everybody, said Ian Katz, an analyst at Capital Alpha Partners in Washington. “There’s a general feeling of anguish and pain as people are unemployed, underemployed and businesses shut down -- surely the government can do more for them.”Not a BailoutFederal loans for the airline industry, which Mnuchin has repeatedly said are not a “bailout,” come with strings attached that analysts say may be less attractive than private markets. Any company tapping the loan pool must assure the government that credit is “not reasonably available” elsewhere.United Airlines, for example, is eligible for a loan of as much as $4.5 billion and the company expects to issue the department warrants to purchase 14.2 million shares of the company’s common stock, CFO Gerald Laderman said in a May 1 earnings call.Savanthi Syth, an analyst at Raymond James, said the department’s terms are not excessive but are onerous enough for airlines to turn first to the private sector.“The test for whether airlines will need this will be how much demand comes back this summer,” she said. “If we see demand getting back to 50% levels of last year, they might not need to tap it.”The $2.2 trillion pandemic stimulus package that authorized the airline loans gives Treasury until the end of the year to disburse them.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- MarketWatch
These areas of the economy ‘will not come back’ from the coronavirus pandemic
With many countries beginning to emerge from lockdown, attention has turned to the economic recovery from the coronavirus pandemic.
- InvestorPlace
United Airlines Is a Little Bit Less Ugly
When the novel coronavirus touched down on the U.S., the broader travel industry, including top players like United Airlines (NASDAQ:UAL), Delta Air Lines (NYSE:DAL) and American Airlines (NASDAQ:AAL) suffered an almost immediate impact. Of course, this volatility is hardly surprising. Even in the best of circumstances, you can easily get sick in a densely packed flying tube with wings. Thus, UAL stock and its rivals hit every branch of the ugly tree.Source: NextNewMedia / Shutterstock.com However, as my high school football coach loved to say, tough times don't last, but tough people do. For United, it appears that the societal and economic backdrop, while still terrible, are showing signs of life. First, most states have now initiated reopening measures to various degrees. Even economic strongholds like California and New York have implemented regional reopening.Better yet and to my second point, the American public has responded eagerly. Conspicuously, we noticed huge crowds swarm beaches and other large events across the nation. In many cases, it appeared that few cared little about social distancing or mitigation procedures such as wearing masks. After being cooped up in their homes, Americans just want to have fun, to loosely paraphrase Cyndi Lauper.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYou can question the wisdom of these antics. At the same time, this is a positive development for UAL stock. If people are willing to mix it up with thousands of strangers, they'll likely be open to do so with hundreds. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure Further, travel data - if you're looking at it from a glass-half-full perspective, is encouraging for UAL stock. For instance, the Friday before Memorial Day weekend saw a big percentage gain in air passenger volume relative to this year's lows. The New Normal Will Be Ugly for UAL StockFortunately for speculators, airliner stocks have resonated with the improved travel sentiment. Since mid-May, UAL stock - along with other airliners - have posted double-digit performances. On the surface, it seems that the markets are slowly shifting toward a risk-on profile.Adding to this argument is biotechnology specialist Novavax (NASDAQ:NVAX) announcing the start of early stage clinical trials for its coronavirus vaccine. Should encouraging results stem from the trials, it would potentially give concerned Americans multiple vaccination or treatment options.And really, boosting confidence is what everybody has been trying to do, from the federal government with its emergency relief programs down to local businesses. That momentum is generating has been good enough for those wanting to bet on UAL stock.Granted, its huge discount makes it an attractive buy on paper. However, investors should look at the entire picture before reserving a position.On the Saturday before Memorial Day, Fox Business reported that the Transportation Security Administration screened 253,190 passengers. This was down a staggering 88% from the 2.12 million passengers that flew in the year-ago level. Click to EnlargeSource: Data from Statista In other words, the rebound volume is only 12% of normal capacity. What makes this allocation worse is that this depressed level hasn't been unusual since the pandemic shuttered almost everything. Between April 2 and May 21, the average passenger volume is 6.63% that of 2019 volume during those same days.Yes, a shift from 6.6% to 12% is a sizable improvement. However, if passenger volume continues to remain below 20% throughout this year, I highly doubt that we need so many airliners.While United should survive a potential game of musical chairs, it's very difficult to live off a consumer base that's been gutted 80% or more. International Flight Implosion Will Be a KillerAs you might imagine, the dearth in domestic air travel demand applies to the international realm as well. In fact, many popular global tourist destinations have suffered a catastrophic implosion.Case in point is Japan. This year, the country was scheduled to host the 2020 Summer Olympics before the coronavirus changed everything. Thanks to China, that part of the world received a black eye to its image.Indeed, the situation is so bad that the Japanese government is considering subsidizing some of the travel costs for foreign visitors. While that seems like an extreme measure, consider that only 2,900 non-Japanese tourists visited Japan in April. That's down an unfathomable 99.9%.I'm not sure how Japanese businesses levered to tourism are going to survive this calamity. And I ask the same question about UAL stock and similar investments. Chances are, you're not swimming to Japan. So, this demand erosion represents a direct hit to the airliners.Ultimately, United Airlines is still in the same position it was back when the coronavirus touched down. That the narrative got slightly less ugly doesn't change the overall equation.A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post United Airlines Is a Little Bit Less Ugly appeared first on InvestorPlace.
- InvestorPlace
Visa Is Buy-Worthy Stock as the U.S. Continues to Reopen
Airlines, cruise stocks and other beaten-down assets are surging back to life. That's as investors pile into these equities on optimism over the U.S. reopening. But let's not forget about Visa (NYSE:V), a high-quality play that should benefit too. V stock is up almost 50% from the lows, but could it have more to go?Source: Tada Images / Shutterstock.com I like Visa for a couple of reasons, but here's the main one: It can function with an open or closed economy.Obviously a prolonged recession doesn't do credit card companies any good. That will lead to a selloff in Visa, but also in MasterCard (NYSE:MA), Discover (NYSE:DFS) and American Express (NYSE:AXP). For now though, we're not looking at a prolonged shutdown, which bodes well for the group.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Reopening AmericaA number of stocks -- from Carnival Cruise (NYSE:CCL) to Delta Air Lines (NYSE:DAL) -- have been hammered. That's as much of the U.S. and many parts of the world entered multi-week and multi-month lockdowns. That's a clear detriment to their business model. For Visa though, there's at least a silver lining. The company benefits from online sales too. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure So as consumers sign up for Netflix (NASDAQ:NFLX) and shop on Amazon (NASDAQ:AMZN), those credit card sales are ringing up. Further, Costco (NASDAQ:COST), Target (NYSE:TGT), Walmart (NYSE:WMT) and other big-box retailers had a strong quarter as the public stocked up on goods. Click to EnlargeIs this enough to offset all of the lost sales over the past few months? No, not completely. But it helps quite a bit. Combine that with the country beginning the reopening process -- and seeing fast action by the public -- and it's no wonder V stock is in demand. Taking V Stock a Step FurtherThe country is reopening and that's an obvious boon for credit card companies. But let's not forget, Visa has cemented itself in a long-term secular trend. As we digitize our wallets -- shifting to more online sales, using cryptocurrency, etc. -- this is only going to benefit Visa and others.However, Visa also benefits from a secular shift from cash and check to credit and debit. This trend has been in play long before the novel coronavirus came along and will remain in trend long after it's gone.Further, Covid-19 will likely accelerate tap-to-pay, touchless pay, money sharing and other technologies that don't rely on physical money handling. Put simply, Visa has a hand in all the different future versions of payment -- different formats of which continue to pop up.PayPal (NASDAQ:PYPL) CEO Dan Shulman says digital payment trends are accelerating at a rapid pace. One recap of his comments stated that, "e-commerce and digital payment trends in three months have gone where it previously may have taken three-to-five years to achieve."Why does that matter? Because it will continue to fuel top- and bottom-line growth for companies like Visa. Valuing VisaFor now, current estimates call for revenue to fall 4% in 2020 to approximately $22 billion. On the earnings front, estimates call for a 7% decline this year. If we could see break-even results this year, it would bode well for investors and V stock. Particularly as this is a core holding in many portfolios.While Visa does have roughly $17.8 billion in total debt, remember, this is a $425 billion market cap company. That's a small sum for a company of this size. Further, total assets of $72.8 billion are almost double total liabilities at $38.2 billion.There's just one other point I want to make. We often praise Facebook (NASDAQ:FB) for its margins and profitability. The company sports trailing gross margins 81.72% vs. Visa at 81.55%. However, when it comes to net profitability, Visa dominates. Its net margins are all the way up at 52.26% compared to Facebook at "just" 28.57%.Combine that with an economic reopening and it's no wonder V stock is rallying.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Visa Is Buy-Worthy Stock as the U.S. Continues to Reopen appeared first on InvestorPlace.
- InvestorPlace
Southwest Is a Much Better Pick Now Than American Airlines Stock
The last few weeks have been big for airline stocks. Moderna (NASDAQ:MRNA) gave the industry a glimmer of hope with a novel coronavirus vaccine update. States continue to reopen, and travel demand is on the rise. American Airlines (NASDAQ:AAL) stock has been a big beneficiary.Source: GagliardiPhotography / Shutterstock.com While a vaccine would be a Hail Mary pass for beleaguered airlines, I wouldn't necessarily rush out to pick up AAL stock.Why? Even if a vaccine comes out next autumn -- and that would be an absolute best-case scenario -- airlines will struggle to recover over the next few quarters. American Airlines simply isn't well equipped to get through that struggle, making it a poor choice to play the rally in airline stocks.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Debt Is Weighing Down AAL StockFrom an investment standpoint, American Airlines' biggest problem right now is debt. The firm is sitting on a $21.6 billion debt pile -- high by any standard. AAL stock is easily one of the most debt-ridden airline names you can pick up right now.United Airlines (NASDAQ:UAL) is the only other airline that comes close with long-term debt obligations of $13.2 billion. By contrast, Southwest Airlines (NYSE:LUV) is carrying just $2.3 billion worth of long-term debt. Understandably, American is burning through cash right now as it works to stay afloat amid extremely challenging conditions. But that's going to add up to a huge debt pile that will follow the firm around for quite some time. InvestorPlace's Mark Hake estimates the firm will be sitting under a $40 billion debt obligation by the end of the year. That's disastrous from an investment standpoint because it means the company will be shelling out billions each year just to pay off the interest. Should You Believe in the Vaccine Turnaround?Some might argue that the prospect of a vaccine could bring a faster-than-expected recovery in the transport sector as it means borders would be open and people could move about freely. That may be true, but that scenario is unlikely to play out.Even if we could be certain a vaccine was coming, there's no way to predict how readily it would be accepted by Americans, let alone the rest of the world. Here's a new drug that's been pushed through the testing process as quickly as possible -- will people trust it? There's already been some pushback regarding a mandatory vaccination and a drug hasn't even been approved yet.Plus, there's the added impact of the economic downturn that the world will be experiencing, vaccine or not. Unemployment is expected to remain in the double digits for the next few quarters, a fact that will likely keep many people from traveling. Not to mention that companies will cut business travel to the absolute bare minimum in an effort to save money. American Airlines Isn't All BadWhile things look bleak for airlines right now, it's worth noting that demand will eventually recover. That's especially true if a viable vaccine makes it to market. Regulators are already looking at ways to make airports safer while the coronavirus is still a factor. But the world of airline travel will probably look very different, at least in the near term. That's not great news for American because the firm will struggle to compete with domestic rivals like Southwest which are known for their low-cost models. However when air travel does restart, American may offer an edge because of its business class seating options. Many travelers worried about contracting the coronavirus may want to avoid a crowded cabin. Companies like Southwest don't offer first-class cabins.But then again, other carriers like Delta Air Lines (NYSE:DAL) and United offer premium seating with more space, and those companies aren't nearly as highly leveraged. The Bottom LineWith all of the uncertainty surrounding the novel coronavirus and the future of the U.S. economy, AAL stock just isn't worth the risk.Investors who are keen to pick up an airline stock and play the sector's recovery should be looking to Southwest, which boasts a far more solid balance sheet and will likely see its business recover faster as domestic travel returns at the end of the summer. Laura Hoy has a Finance degree from Duquesne University and has been writing about financial markets for the past 8 years. Her work can be seen in a variety of publications including InvestorPlace, Benzinga, Yahoo Finance and CCN. As of this writing Laura Hoy did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Southwest Is a Much Better Pick Now Than American Airlines Stock appeared first on InvestorPlace.
- InvestorPlace
How This Week Highlights the Challenges Facing General Electric Stock
I've been a skeptic toward General Electric (NYSE:GE) stock for some time now. Truthfully, I'm not too happy about it.Source: Sundry Photography / Shutterstock.com After all, General Electric once was one of America's greatest and most innovative companies. It provided thousands of employees with stable jobs and generous retirement plans. GE stock was a core holding of pension funds and individual investors.Sadly, that's no longer the case. General Electric offers many fewer jobs: its workforce shrunk 28% worldwide in 2019. And GE stock, almost incredibly, touched a 29-year low this month. Its dividend has been cut -- twice.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe reality is sad. But it's still the reality. Investors need to react accordingly. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure While I still hold out hope for General Electric, I can't yet recommend that investors put their own hard-earned money behind the company's turnaround plans. Two pieces of news this week show why. GE Exits the Lighting BusinessOn Wednesday, General Electric announced that it had sold off its Lighting business. It is the end of era. After all, General Electric traces its history back to Thomas Edison and the light bulb he invented. That link has now been severed.Perhaps more importantly, as Bloomberg noted, GE is no longer a consumer company at all. Many of us remember the company's iconic "we bring good things to life" ad campaigns of the late 20th century. But GE Appliances now is owned by Germany's Haier (OTCMKTS:HRELF). The lighting business was sold to privately held Savant Systems.There's more than symbolism to the deal, however. According to the Wall Street Journal, GE Lighting sold for just $250 million. Over half of that was assumed liabilities. And it came after GE spent years trying to exit the business, during which time it sold off its Current LED business and some overseas operations as well.What the deal, and the process leading up to it, provides is another example that GE simply isn't what it used to be. Older investors, in particular, may have a sense of General Electric that simply isn't accurate anymore.As I've written before, General Electric's response to everything for years now has been to shrink. That process continues.GE stock did rally 8% on the news, but that gain seems driven more by bottom-fishing on a green day for the market than the transaction itself. $250 million simply isn't that material against a market capitalization still in the range of $60 billion. It's obviously not enough to offset the concerns that are keeping GE stock well into the single digits. Culp Speaks and GE Stock FallsTo be fair to GE, the decision to continually shrink the business isn't necessarily the wrong move. Chief executive officer Larry Culp is widely respected after his enormously successful tenure at Danaher (NYSE:DHR), and with good reason.But that's precisely the point. If GE could grow, Culp would be trying to drive growth. But with the company beset by a still-troublesome balance sheet and significant pension obligations, the focus has to be on getting the company back on solid footing first.The coronavirus has upended those plans. It has hammered GE's Aviation business, which counts Boeing (NYSE:BA) as a key customer.That in turn is testing investor patience. Culp said at a conference Thursday that GE would burn $4.5 billion in cash in the second quarter alone. GE stock fell 7% in response.The issue isn't just Aviation, but GE Capital. That unit finances aircraft, and as Culp put it "is seeing a good bit of pressure" from customer deferrals.The weakness from aircraft isn't ending in the second quarter. It's likely not ending in 2020, or even 2021. An investor need only look at the share prices of American Airlines (NASDAQ:AAL) or Delta Air Lines (NYSE:DAL) to see what the market is pricing into those stocks.There's simply not that much slack in GE's free cash flow profile right now to manage that kind of multi-year pressure. Even before the coronavirus hit, GE was guiding for industrial free cash flow (i.e., excluding GE Capital) of just $2 billion to $4 billion. If Aviation is down for the count, free cash flow stays flattish at best. And that leaves GE with little in the way of options. A Tough SpotThe problem for GE stock at this point is that the company has to fix its balance sheet through free cash flow. It's pulled all of the other levers.Again, it's sold businesses, including the $21 billion sale of GE Biopharma to Danaher that closed earlier this year. There's really nothing left. GE Power is in the midst of a turnaround, Aviation is in trouble, Renewable Energy is small (and providing some growth), and Healthcare is the profit center.Simply put, GE has to start making money. It's not doing so. And, again, I don't think that's necessarily the fault of Culp. It's largely the result of past decisions, among them the disastrous acquisition of Alstom that closed in 2015.Whatever the cause, GE simply isn't a leader anymore. It's not a giant. It's not an innovator. GE is not what it was. What the news from this week reinforces is that General Electric simply is a cash-burning company trying to turn itself around. And even in a best-case scenario, it likely has years left of work to do.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post How This Week Highlights the Challenges Facing General Electric Stock appeared first on InvestorPlace.
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