Should I buy Delta Air Lines shares in January 2022?

Delta Air Lines, Inc. (NYSE: DAL) shares have weakened from $45.52 to $33.40 since November 08, 2021, and the current price stands at $39.30.

Deutsche Bank has a positive view of Delta Air Lines

Coronavirus pandemic continues to pose downside risks for the aviation sector, and nobody still doesn’t know when normal demand will return.

The World Health Organization reported that the Omicron variant might cause milder symptoms than the delta variant, but China limited tourist travel despite this.

The United Kingdom recommended working from home, while Germany reported that only vaccinated or recently recovered from Covid will be allowed to go to cinemas, leisure facilities, restaurants, and shops.

According to FlightAware.com, more than 950 Christmas Day flights, including domestic flights and those into or out of the U.S., were canceled, up from 690 on Christmas Eve.

The average number of new U.S. coronavirus cases has risen 45% to 179,000 per day over the past week, and among the most impacted airports for cancellations were Los Angeles International, New York’s JFK, Atlanta’s Hartsfield-Jackson, and New Jersey’s Newark Liberty.

Delta Air Lines canceled more than 10% of its scheduled flights on Saturday as Omicron directly impacted the company’s flight crews and the people who run the operation.

On the other side, Deutsche Bank reported last week that it remains constructive on the airline sector for 2022 and assigned a buy rating on Delta Air Lines shares. Michael Linenberg, an analyst from Deutsche Bank, added:

We are reiterating our investment thesis which is that airline stocks represent a very attractive way to participate in the reopen trade. While that thesis has not been embraced by investors for much of 2021, save for the March quarter when the stocks rallied ~30%, our view is anchored by the fundamentals, which have improved since the beginning of the year, despite several subsequent COVID waves.

Looking forward, Delta Air Lines has strong growth prospects, but every negative news connected with coronavirus will negatively influence the stock price.

$35 represents strong support

Delta’s stock price has fallen more than 20% after reaching the highest level in 2021 of $52.28 on March 15, and for now, bears remain in control of the price action.

Data source: tradingview.com

If the price jumps above $48 in the upcoming weeks, it will signal trading shares, and the next target could be at $50 or even above.

Summary

Coronavirus pandemic continues to pose downside risks for the airline sector, but Deutsche Bank reported last week that it remains constructive on the airline sector for 2022 and assigned a buy rating on Delta Air Lines shares. Delta’s stock price has fallen more than 20% after reaching the highest level in 2021; still, if the price jumps above $48 in the upcoming weeks, the next target could be at $50 or even above.

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