Sit Tight on Air Canada - Look for $18.50 I think you'd be quick to be buying right now. There is likely more bad news ahead for the airline sector as a whole, and they tend to move together.
Airlines were trading sideways for weeks, then United Airlines announced their dismal earnings last week and the whole sector broke support and started trending down.
American Airlines reports earnings in 2 days, why would they be in a better spot? I think they will again report dismal earnings with poor forecasts and the whole airline sector will keep trading down.
Now, for my bullish case on air Canada. Canada just appointed a new Transportation Minister, so I think he is still quite fresh into office and it is unlikely he cuts a deal quickly with air Canada... but I DO think he cuts a deal. We are talking about the largest airline in the country, with the most international flights. They can't just let them fall by the wayside, this isn't a restaurant that the market share can quickly be swallowed up by new comers to the market. This is an airline... it takes immense amounts of capital to get going, and as a previous comment stated Air Canada is still sitting on $8.7B of cash, so once they can get rolling again, they will.
personally, I would sit on my hands right now. Look to buy this stock near $18.50, I think this would be an attractive level and I can't see you losing your shirt if you're willing to hold this for a year. Last time we had some vaccine optimism it popped off to $28.50, that's a nice 55% return from the $18.50 buying point which I think is very realistic within a year.
If you found any of this info/opinion useful check out my most recent podcast episode about the airline sector, with a focus on Air Canada. It is only 10 minutes long, let me know what you think
10 Minute Investing Canada
Spotify, Apple Podcasts, Google Podcats, Breaker, Overcast, Pocket Casts & Radio Public