Please do not be too quick to judge as Delta Airlines Stock might prove you wrong!
There are a plethora of reasons to not have faith in Delta Airlines as a Delta stock investor. With the pandemic and the possibility of a fall in the infected cases to be almost negligible, one is bound to think of it that way.
Now a stock price when it is low is a good opportunity to invest. If you buy shares at this current price then you will have a lot to earn in the future. Though Delta is going through a dark phase presently, the fundamentals have something different to say. It shows that the top performer in this unfortunate situation is this airline. Analysts are still hopeful about the airline despite the sustenance of loss fairly visible.
Reasons Why You Can Still Earn as a Delta Stock Investor
The report on the quarterly earnings of the airline was quite low. Last year the company had earned a profit of $1.5 billion but this year they suffered a $5.4 billion loss, which is a broad difference. This also includes an 83% decline in travel by passengers, due to obvious reasons. A $3.30 loss as opposed to the negative which was predicted at $3.10 was seen in the earnings per share.
Moving on to the reasons why you stand a chance at earning from investing in the stocks,
1: As against the estimation of analysts who predicted a $2.3 drop in the passenger revenue, the Delta airline actually dropped by just $1.9 billion. This outcome does give a ray of hope.
2: The liquidity position of the company is the most important player. Currently, the airline has a huge liquidity amount of $21.6 billion.
3: The liquidity burn rate per day for Q3 was $24 million and by September it was reduced to $18 million. This number is not something to be proud of, although it is a reduction than the cash burn of each day of June which was at $27 million. This will be a stagnant rate as there is no possibility of the cash burn going any further down for now.
For now, the investors might not earn from the Delta stock but this will not go on forever. Things are set to change very soon.
There are no clear-cut views regarding the travel industry. With the election results yet to be out, nothing can be said of a second stimulus package. Although most people seemed to be in favor, anything can happen at the last minute. However, if there happens to be any government aid in the coming months then the Delta Air Lines stock will rise further.
