EUROPEAN TRAVEL STOCKS SET FOR HUGE UPSIDE 📈✈️🎉
Ryanair numbers for passengers traveling with them are as follows
June 2020 = 0.4 Million passengers June 2021 = 5.3 Million passengers
Also if we look at their monthly numbers we will see the trend April 2021 = 1 Million passengers May 2021 = 1.8 Million passengers June 2021 = 5.3 Million passengers
With the majority of European countries not even easing their travel restrictions until July Ireland/UK July 19th.
We are likely to see the first major indicator of recovery for these heavily beaten Euro airliners/travel stocks.
The first of the group to report is Airbus on July 29th and I’d expect this to be a huge indicator of strength in the sector. (Pending good results)
Then IAG reports on August 4th Followed by Rolls Royce on August 5th
It is Rolls Royce that actually interests me the most at the moment as recent delta variant fears saw its share price drop from £1.10 down to as low as £0.85
It currently is trading at £0.95 as of writing this.
Rolls Royce was battling alot of negatives before the pandemic and they are HEAVILY dependant on LONG haul flights for the majority of their Aero Space income.
They had issues with the Trent 1000 engines plaguing them which thankfully now seems to have a solution in sight.
Their biggest obstacle at the moment is their own balance sheet, they are heavily in debt but have engaged in cost saving measure over the last 10 months and these could finally be reflected in their August earnings.
The biggest catalyst is they are currently in the Sale of ITPAero (A Subsidiary of theirs) which is expected to sell for approximately £1.6 billion pounds.
This will go a long way to help shore up their balance sheet. They are also selling their share in the refueling company Airtanker.
If we list the positive catalysts for this stock.
Sale of ITPAero Sale of Bergin Engines Sale shares in Airtanker Sharp increase in long haul flights since June Annual Meeting August 5th Price Target of £1.50 by German Analyst Citi Group Analysts says "Significant Long Term Value". Deal with Royal Dutch Shell on SAF supply New Larger Trent 1000 Engines running on 100% SAF (Sustainable Aviation fuel)
I beleive because of these catalysts we are very likely to see Rolls Royce shares go from £0.95 to £1.50 before the end of this year (58% upside) with 2022 seeing the share price get back north of £2.50 per share.
They also have deals with Space X and Virgin Galactic as well as defence contracts with the British & US governments.
So you are essentially getting to own a piece of a HEAVILY INDEBTED aerospace giant at the tail end of a global pandemic that desimaged the travel industry on which it relies on massively.
For this reason I have been consistently buying the stock since February with a cost average of £0.90 per share. I see this as a likely route to 100% returns within 1 year, with 58% if those returns arriving in the short term.
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July 22, 2021 at 04:42PM