Finally, after a long summer of increasing numbers of cases of the Delta variant, experts think that the rate of new cases should continue to decline drastically by the end of September. That’s extremely good news for an economy and society that has been dealing with this health crisis for almost two years. It has been well documented who are the winners and the losers across Wall Street during this time, and one industry that has had its shares of trouble and has been on a roller-coaster ride looks poised to rebound big over the fourth quarter and in 2022.
[in-text-ad]
The airline industry at one point in 2020 looked doomed, as air travel ground to a near halt. While there was a strong rebound as 2021 started, things have reversed some due to the surge in Delta variant cases. The good news from the medical prognosticators like Dr. Scott Gottlieb is that the former FDA chief said the peak of the Delta surge in the United States likely will be in late September, hitting northern states after rates slow in the South.

We screened our 24/7 Wall St. research universe looking for airline stocks that were rated Buy across Wall Street and are offering investors a great entry point. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Alaska Air

This company has big west coast exposure and continues to rank high on Wall Street as consumers return to the sky for business and holiday travel. Alaska Air Group Inc. (NYSE: ALK) is the parent company of Alaska Airlines, which serves more than 100 cities through an expansive network in Alaska, the Lower 48, Hawaii, Canada and Mexico. Despite recent challenges by other carriers for superiority in the Northwest, the company has strong customer loyalty, which has contributed to outstanding earnings and revenue growth.

Alaska Air focuses on point-to-point traffic in the Pacific Northwest. However, about 20% of its traffic connects over its hubs in Anchorage, Seattle, and to a lesser extent Portland. By developing transcontinental markets, and more recently Hawaii, the company has transformed from a largely north-south directional carrier to one with a more balanced network.

BofA Securities has an $80 price target on Alaska Air stock. The Wall Street consensus target is even higher at $81.71, but shares traded at $57.80 early Wednesday.

Delta Air Lines

This stock consistently has ranked high with Wall Street and, after a stiff reversal, looks like a great bargain now. Delta Air Lines Inc. (NYSE: DAL) provides scheduled air transportation for passengers and cargo in the United States and internationally.

Its domestic network is centered on core hubs in Atlanta, Minneapolis-St. Paul, Detroit and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle. Its international network is centered on hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon.
Delta Air Lines sells its tickets through various distribution channels, including its website and the Fly Delta app, online travel agencies, traditional brick-and-mortar agencies and other agencies. It also provides aircraft maintenance, repair and overhaul services, as well as vacation packages to third-party consumers, aircraft charters and management programs.

Raymond James has a Strong Buy and a $58 price target. The consensus target for Delta Air Lines stock is $55.68, and shares traded at $40.55 Wednesday morning.
[in-text-ad]

JetBlue Airways

This stock has been obliterated in the past six months, but the carrier holds a very commanding position on the east coast of the United States. JetBlue Airways Corp. (NASDAQ: JBLU) provides air transportation services. As of December 31, 2020, the company operated a fleet of 63 Airbus A321 aircraft, one Airbus A220 aircraft, 13 Airbus A321 neo aircraft, 130 Airbus A320 aircraft and 60 Embraer E190 aircraft.

The company serves 98 destinations in 30 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and 23 countries in the Caribbean and Latin America. JetBlue has a strategic partnership with American Airlines to create connectivity for travelers in the Northeast.

The BofA Securities price target is $22, and the consensus target is $20.13. JetBlue Airways stock traded at $15.00 on Wednesday.

Southwest Airlines

This company continues to expand routes and remains a low-cost leader, and is also one of the top airline picks across Wall Street. Southwest Airlines Inc. (NYSE: LUV) operated a total fleet of 718 Boeing 737 aircrafts, as of December 31, 2020, and served 107 destinations in 40 states, the District of Columbia and Puerto Rico, as well as 10 nearby international countries, including Mexico, Jamaica, the Dominican Republic, Costa Rica and Cuba.

Southwest Airlines services also cover destinations in Hilo on Hawaii; Cozumel, Mexico; Steamboat Springs, Colorado; Miami, Florida; Palm Springs, California; and Montrose (Telluride and Crested Butte), Colorado. In addition, the company provides inflight entertainment and connectivity services on Wi-Fi-enabled aircrafts, and its Rapid Rewards loyalty program enables program members to earn points for dollars spent on Southwest base fares.

Morgan Stanley recently reiterated its Overweight rating but lowered the price target to $80 from $85. That compares with a $66.40 consensus target on Southwest Airlines stock, which traded at $49.10 early Wednesday.

Given some of the vaccine and travel restrictions across much of Europe and Asia, we focused on the airlines with a larger domestic presence and those with service to the Caribbean and Hawaii. We also avoided the super low-price carriers, as some of them have had recent problems with staffing and other issues. Due to the recent stock price back-ups on all four of these top companies, growth investors can add the top performers at bargain prices.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.