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United Airlines (UAL) stock is said to have good chances to rise after the COVID-19 situation is over. Today it is fully in the green.
United Airlines Holdings Inc (NASDAQ: UAL) stock may take off after COVID-19. This is what prominent investment analyst Luke Lango thinks. Sources report that the Caltech graduate said that that UAL is the best of the lot.
While some people blame cryptocurrencies for their volatility, stocks are not netter at all in this context these days. UAL stock price remains as volatile as Bitcoin price. And taking it into account, we can be sure of an exciting ride during this period of uncertainty.
On March 20, Bitcoin was up over 15%. United Airlines stock managed to jump over 26%.
As at the time of filing this report, United Airlines (UAL) stock price was at $24.64 (15.79%).
In a period when world governments are shutting down just about everything, it’s rare to see someone who is seeing past COVID-19. The investment space has been filled with the fallout because of the coronavirus. Markets have dropped to new lows. The travel industry has disappeared. Airlines are bleeding cash. Formerly open skies have now become closed skies globally.
Luke offers several reasons why UAL is the best stock pick at the moment.
United Airlines (UAL) Has Great Numbers
Even with a 70% drop, UAL stocks still seem to be a great pick. its savings fortress of $8 billion as against $20 billion in liability-free assets is a great sign. The Airline’s management executives know their onion when it comes to having the numbers right. Sudden shocks in the air travel industry won’t affect the human resources of the airline by a wide margin. And that says one thing to investors as well: the company is in great credit shape.
This is also an indicator that the COVID-19 situation won’t affect the airline by that much financially.
Sources also said that Luke noted that the airlines’management will ” still maintain liquidity levels north of $3 billion”.
This is if all things don’t go according to plan and revenues go south by 20% or more.
Many expect things to recover on a faster note than the previous crises in recent history. Airlines in the United States bounced back after 9-11. The 2008 financial crisis is also another great example. Airlines during both periods reportedly recovered a year after.
The other three big Airlines aren’t having it easy either. sources say that Delta Air Lines, Inc. (NYSE: DAL), American Airlines Group Inc (NASDAQ: AAL), and Southwest Airlines Co. (NYSE: LUV) are facing dire straits at the moment. This, however, will end soon as the current emotional responses concerning COVID-19 will soon disappear come summer.
Luke indicated that the peak emotional responses to the coronavirus will happen either in April or in May. After that, emotions are expected to stabilize and things will return to some form of normalcy.
Added to this, several organizations are working furiously on potential vaccines and forms of treatment to combat the current pandemic.
U.S. Government May Become the Airlines’ Big Brother
Once forms of treatment emerge, the world will heave a sigh of relief and things will get back to normal. at least this is what many believe.
Then again, there is the ultimate response if everything doesn’t work and the Airlines need a shoulder to lean on. The US government is willing to be that shoulder. At least this is what President Trump has reportedly said.