Long Position on DAL @ $26.00 on 4/15/2020 (Momentum)

Delta Air Lines, Inc. (DAL) provides scheduled air transportation for passengers and cargo in the United States and internationally.

The company operates through two segments, Airline and Refinery. Its domestic network 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; and international network centered on hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle, and Seoul-Incheon.

The company sells its tickets through various distribution channels, including delta.com and the Fly Delta app, telephone reservations, online travel agencies, traditional brick and mortar, and other agencies.

It also provides aircraft maintenance, repair, and overhaul services; and vacation packages to third-party consumers, as well as aircraft charters, and management and programs. The company operates through a fleet of approximately 1,000 aircraft. 

Delta confirms agreement for $5.4B in U.S. emergency relief - Delta CEO Ed Bastian said in a statement, "After discussions with the U.S. Department of Treasury, we've reached an agreement for $5.4 billion in emergency relief, part of the CARES Act economic stimulus approved by Congress and the President. The funding, along with self-help measures we have taken, will prevent furloughs and pay rate reductions through the end of September, despite the 95 percent drop we've seen in passenger traffic. We also raised over $3 billion in new cash in the March quarter. These steps, taken together, are vital to protecting Delta's future over the next several months as we operate a minimal schedule to provide essential services for those who must travel. The agreement with Treasury includes $5.4 billion from the payroll support program. The payment includes an unsecured 10-year low-interest loan of $1.6 billion, and Delta will provide the government with warrants to acquire about 1 percent of Delta stock at $24.39 per share over five years. A recent report by Compass Lexecon, a top economic research firm, concluded that emergency relief grants for our industry will drive $18 billion to $27 billion of direct economic impact in just the next six months, and $25 billion more over the next two years.

This stock has earnings on April 29th.

The airline company should move higher with the announcement of the US government stimulus fund towards airlines. The government is taking 1% of Delta stock at $24.39 per share over five years. 

Entry point: $25.75

52-week trade range: $19.10 - 63.44

Stop/Loss: $24.70

Target Price: $28.50

Updates

5/27/2020 9:42:22 AM

DAL closed at $27.20

Position closed on 5/27/2020 at price of $27.20 with a 4.62% gain in 42 days.

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