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Delta Air Lines, Inc. (DAL)

NYSE - NYSE Delayed Price. Currency in USD
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41.29+0.03 (+0.07%)
At close: 4:00PM EST
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  • d
    danaphanous
    Liquidated all my positions in DAL today. Very nice runup, and congrats to everyone that held from the $20's! At this point I feel the stock is a little overpriced, though I think DAL will do fine longer term. Here are the near-term risks I see that will prevent the stock from reaching old highs in the upper $50's anytime soon imo:

    - DAL is still losing money for the foreseeable future even by their own projections. That has narrowed to a cash burn of $30M/day from 100M/day in March, but that is still billions a quarter.
    - Airlines were looking forward to this holidays as it was going to put them much closer to break-even for a quarter, but with COVID cases surging globally we are already seeing a rash of travel cancellations. If the numbers keep worsening the holiday travel season may be significantly curtailed and significant losses could ensue for airlines that had kept staff operating expecting more demand.
    - Until the vaccine is widely distributed there is no reason to assume that travel numbers will improve as winter is traditionally the worst season for travel anyway with low demand. The vaccines will start shipping hopefully towards the end of December, but it will take quite some time for enough to be produced that it will make a dent in travel numbers. The slowest part of ramping up vaccinations is the production, which is biological and ponderous. Pfizer, the most ambitious player, stated they were targeting a bit over 1B doses for all of 2021. Orders have already been comitted to the EU, so it isn't as if the US will get vaccinated first. It will go to the highest bidder and travel will be slow until it is widely distributed to middle income populations, which could be as far out as summer 2021.

    - Conclusion: cash burn will continue and DAL and peers will keep on having to take on more and more debt for at least several more months. Already, DAL has absolutely destroyed their balance sheet. Shareholder equity (assets-liabilities) has declined to near-zero as a result of 12B+ of new net debt in the first 2 quarters alone. Book value will go negative very soon. They will probably survive on government grants and unbacked bonds as the debt markets are healthy, but they will be emerging from this a very different company with a mountain of high-interest debt. The debt they have added already in just 2 quarters would take about 3.5 years to pay down even if business and operating margins returned immediately to record levels in 2019. And let's face it, travel numbers will not be recovering to highs for a while. Not until vaccination is global and the pandemic has burned out. This is my synposis of the industry and why I feel that DAL $40+ is entering overvaluation territory on speculation. It isn't enough that travel numbers recover to 2019 levels for the stock to reach old highs. Their debt position, interest costs, and sharecount have all increased. Dividend probably won't be nearly as high as they will need to focus on paying down the high interest debt. Thus a single share just isn't worth what it was in 2019 even if travel numbers recover to records. Note that peers like UAL and AAL that were in a shaky debt position with near-zero book value traded at a lower P/E multiple compared to DAL. DAL will now likely trade at that lower multiple as well even as things normalize until they pay the debt down. A possible tailwind is if UAL or AAL declare bankruptcy or has to issue higher ticket costs due to their even worse debt positions compared to DAL. GLTA! Just wanted to share my thoughts for those that care to read!
  • P
    Paul
    I bought DAL the day Buffet announced he sold. It's since doubled in price.
    I'll be flying at the front of the plane from now on. Yippee!!!
  • H
    Herman
    TSA numbers for 11/22/20: 1,047,934
    Huge travel demand expected this thanksgiving holiday throughout Christmas and Pfizer emergency use early december as FDA reviews final phase 3 results
    Bullish
  • H
    Herman
    broke $40 premarket
    Bullish
  • E
    Eric
    DAL broke $38 on Jun.8 peak so next peak will be $55.
  • H
    Herman
    Delta best airline in the world. All the doubters need to get a life
    Bullish
  • C
    Cornerlot
    Overvalued on 2021 earnings and debt. Business travelers will be much lower as companies have figured out its more profitable working from home doing zoom videos. I bought at 22 and sold this morning. I like the airlines for trades but as many stocks, too far too fast for 2021 earnings.
  • H
    Herman
    man Pfizer topping Moderna efficacy rates. Pfizer really pushing to release vaccine for emergency use before holidays ahead of my expectations. Sit tight in your seats and fasten seat belts we will liftoff soon 😀
    Bullish
  • N
    Nuno
    I'm still holding but at ~$40 I start to see limit upside potential here.. this was trading at $60 before the pandemic. We don't know how the aviation industry landscape will be (will revenues decrease?), and companies now have a lot more debt on their balance sheet. So even if tomorrow there's no virus anymore, I don't know how this can go beyond $45/50

    Opposite thoughts are welcomed.
  • H
    Herman
    Delta is best airline to buy shares but any of the airlines that are traded in ETFs are good picks as well cause they will trend higher together such as UAL or LUV
    Bullish
  • g
    gary
    Atlanta airport is packed
    Bullish
  • M
    Mark
    Any chance this will go 45-50 in 1-3 weeks?
  • g
    gary
    $60 on vaccine roll out. Buy now.
  • T
    Troy
    Im riding this until next summer. It will be in the mid 50's guaranteed
  • P
    Perry
    Shorts getting burned.
  • P
    Perry
    Big blocks on the buy side. Big boys are coming.
  • J
    Jacob
    Heard that DAL will be acquiring one of the major airlines.
    Bullish
  • K
    KK
    DAL BEST OF THE BREED, SHE'S SMOOTH....AND WITH THE STEADY HANDS FOLKS, $45 NEXT GAP UP Y'ALL!!
  • H
    Helen
    Here's why I'm in DAL. I can't wait to get on a plane! If even a small percentage of Americans feel like I do, those planes are going to be packed once this circus is over.
  • S
    Swaggy
    This should at least be above 40 by xmas