Delta Air Lines (DAL) Stock Price and Forecast: Preparing for take off

As it was mentioned in December what a perfect storm Delta (DAL) faced in 2020 with the pandemic and global lockdowns effectively making it a black swan event for the airline industry and something that no one would have in their price modelling (except maybe for Nassim Taleb!).

Q4 2020 earnings

Delta reported on Thursday a smaller net loss and lower daily cash burn than the market had feared. The company also said DAL’s own survey of large corporate accounts sees nearly half of them back to normal activity by year-end 2021. DAL expects no increase in net debt for the year, cargo revenue increased 10% year on year (YoY) and has reduced capital expenditure to be leaner for the future recovery.

Pent up demand & stimulus

There is significant pent up demand waiting to be unleashed on the travel, leisure industry on a global scale once the pandemic is normalized and under control, as personal savings in the US remain high.  

Additionally, Joe Stimulus Biden is now adding another $1.9 trillion to the economy.

DAL technical analysis

Delta shares traded well on Thursdayon the back of the earnings announcement, closing up 2.5%. Breaking up through old lows near $45 will bring the price back to the long-term range for DAL of $45-$60 in a more normalized environment, with resistance at $51.32 on the way.  To remain bullish, key support at $38.41 would need to hold with $34.79 below.

I do not have a position in DAL. I have no business relationship with DAL. I have received compensation for writing this article.