The airline industry appears to be recovering from a period ravaged by the coronavirus pandemic. Stock prices have recovered significantly, and earnings are set to follow. This recovery creates a perfect opportunity to invest in airline stocks as business travel resumes. We have identified a few airline stocks that you may consider buying in June.
American Airlines
American Airlines Group Inc. (NASDAQ:AAL) shares surged 4.66% on Wednesday amid excitement heading into the Summer. Analysts are optimistic that the return of business travel will be positive for airline stocks, and this is already beginning to show in the AAL stock. The company is expected to experience an earnings growth of 96.20% next year.
Technically, AAL shares are up 185% since bottoming in May last year. However, the stock is still down more than 11% from last year’s highs. This leaves a lot of room to run ahead of an exciting period in the airline industry.
Investors can target profits at around the key resistance levels at $30.86 and $34.87. Key support levels can be found at $22.28 and $19.37.
United Airlines
United Airlines Holdings Inc. (NASDAQ:UAL) is another US airline stock that could experience huge earnings growth in the coming year. The company’s EPS is expected to grow by about 118% next year. This boosts the company’s forward P/E ratio to 23.32, which is attractive for value investors.
The UAL stock appears to be trading within an ascending channel formation in the daily chart. The stock has enjoyed strong support from the 100-day moving average since July last year. The current bull-run looks set to continue ahead of a busy summer.
Investors can target profits at around $74.73 in the short term or higher at $90.26 in the long term. Key support levels can be found at $50.23 and $39.29.
Delta Air Lines
Since May last year, Delta Air Lines Inc. (NYSE:DAL) shares had gained nearly 150%. Like other airlines, the company’s revenue and earnings have been affected by the pandemic. However, this looks set to change in the coming year with a projected earnings growth of more than 204%. DAL stock trades at a forward P/E of just 12.19, which is a significant undervaluation compared to peers.
Technically, DAL shares appear to be trading within an ascending channel formation. This indicates a shift in the market sentiment from bearish to bullish. The 100-day moving average appears to be providing strong support.
Investors can target short-term profits at around $51.85 or $60.05, long term. Key support levels can be found at $42.99 and $37.30.
Bottom line: Airline stocks look exciting as business travel returns
In summary, airline stocks look very attractive heading into the summer. American Airlines, United Airlines, and Delta Air Lines could be set to continue their bullish runs ahead of huge earnings growth next year.
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Motiur Rahman
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