Buy Delta Stock To Gain 20% Post Coronavirus?

by Trefis Team
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Upside
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Trefis
DAL
Delta Air Lines
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Markets have reacted strongly to the increase in cases of the novel coronavirus outside of China and airline stocks have taken a particularly big hit, with Delta Air Lines (NYSE: DAL) falling nearly 20% over the last two weeks. In this analysis, we take a look at how the company’s stock reacted to the H1N1 epidemic of 2009 to understand whether it could go lower from here or if it might be time to get in.

View our interactive dashboard analysis Coronavirus Knocked -14.8% From Delta Air Lines Stock, Time To Buy?

Delta Air Lines Stock has decreased by -16.6% since the end of Jan and decreased by -14.8% since Feb 24

  • On Jan 31, the WHO declared the outbreak a global health emergency. Feb 25 is when the Center for Disease Control (CDC) raised alarm about the broader worldwide spread and in US communities.
  • In comparison, United Airlines’ stock has decreased by 18.1% since the end of Jan and decreased by 18.8% since Feb 24.

Timeline of the 2009 H1N1 pandemic

  • 1st Detection (First confirmed case in the U.S.)                   Mar 30, 2009
  • Identified meaningful (WHO issues outbreak notice)     Apr 24, 2009
  • Peak Spread (CDC says H1N1 may have peaked)                Nov 30, 2009
  • Significant decline (CDC says cases declining steadily)   Dec 19, 2009
  • + 3 Months                                                                                    Mar 19, 2010

H1N1 2009: Delta Air Lines Stock increased by 4% from April to Dec 2009 and then jumped 53.4% in the three months after

  • Delta Stock increased by about 4% in the April to December 2009 period of the outbreak, underperforming the S&P 500 which rose by about 30% in the same period. The broader markets rallied over 2009 as the U.S. recovered from the economic downturn of 2008.
  • However, the stock outperformed as H1N1 infections subsided, rising 53% three months after the Centers for Disease Control and Prevention indicated that cases were steadily declining. The broader market rose by less than 5% over this period.
  • In comparison, United Airlines Stock increased by 20.9% from April to Dec 2009, and then jumped 140% in the next three months.

Conclusion

While Delta Air Lines stock and other airline stocks have seen a significant selloff in recent weeks, it is possible that it could emerge stronger, as they did previously, as the viral outbreak subsides.

Related Analysis:

Coronavirus Knocked -18.8% From United Airlines Stock, Time To Buy?

Coronavirus Knocked 25% From American Airlines Stock. Time To Buy?

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