On Monday, Bank of America reported airline bookings improved for the third consecutive week against pre-pandemic sales. The firm said investors will be watching airline stocks closely as the industry continues to recover from the adverse economic effects of the pandemic.
American Airlines Group
American Airlines shares trade at a steep forward P/E ratio of about 140.81, making the stock less attractive to value investors.
In addition, analysts expect its earnings to decline by a whopping 583% this year before bouncing back by 1025 next year. Therefore, growth investors could also opt for alternatives in the market.
Source – TradingView
Technically, the stock appears to have recently pulled back to trade below the 100-day moving average. As a result, the stock has fallen closer to the oversold conditions of the 14-day RSI, creating an opportunity for a rebound.
Therefore, investors could target potential rebounds at about $20.25, or higher at $21.97, while $17.43 and $15.82, are crucial support zones.
Delta Air Lines
Delta Air Lines shares have recently plummeted to trade at an exciting forward P/E ratio of 11.45, making the stock a compelling option for value investors.
In addition, although analysts expect earnings to fall by 366% this year, they also forecast a significant rebound of more than 223% next year. As a result, the stock could still gain the attention of growth investors.
Source – TradingView
Technically, Delta Air Lines shares seem to have plunged to trade closer to the oversold conditions of the 14-day RSI, creating an opportunity for a rebound.
Therefore, although the stock is yet to retest the trendline support, it could bounce back, surging towards the 100-day moving average.
As a result, investors could target profits at about $41.51, or higher at $43.62, while $37.42 and $34.99 are support levels.
Buy DAL, sell AAL?
In summary, although both stocks appear to be technically poised for a rebound, American Airlines looks expensively valued compared to Delta Air Lines.
Therefore, given DAL’s forecast earnings rebound next year, it seems like the better buy.
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