Nasdaq Markets

Image source: The Motley Fool.

Image source: The Motley Fool.

(RTTNews) - Indian shares are seen opening higher on Thursday after Pfizer Inc. and BioNTech signed a $2 billion deal to supply their experimental coronavirus vaccine to the U.S. government.

(RTTNews) - Sun Communities Inc. (SUI) reported that its second-quarter net income attributable to common stockholders rose to $58.9 million or $0.61 per share, from $40.4 million or $0.46 per share last year.

(RTTNews) - Suncor Energy Inc. (SU, SU.TO) reported a net loss of C$614 million or C$0.40 per share in the second quarter of 2020, compared to net earnings of C$2.729 billion or C$1.74 per share in the prior year quarter.

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(RTTNews) - The Thai stock market has alternated between positive and negative finishes through the last six trading days since the end of the two-day slide in which it had fallen more than 20 points or 1.7 percent. The Stock Exchange of Thailand now rests just above the 1,355-p

With the Q2 earnings report, Delta Air Lines (DAL) reported some huge under the surface improvements in the business. The market remains highly negative on the airline stock as quarantines slapped on passengers going to New York stall the traffic rebound.

The airline has been able to reduce the daily cash burn rate to levels that are no longer dire. With a huge liquidity position, investors can start playing the normalized earnings game in the next couple of years.

Eliminating Cash Burn

Not long ago, airlines like Delta panicked the market with discussions of daily cash burn levels of $100 million. The airline sector had seen an unprecedented collapse in traffic due to a virtual shutdown of the economy and the majority of tourist destinations.

It didn’t help that airlines provided prognoses based on zero-revenue environments. Now, Delta reported the June daily cash burn dropped down to $27 million, representing a 73% improvement. The domestic cash burn rate is down to only $17 million, with the ongoing shutdown of international routes accounting for $10 million in costs.

The airline has amazingly achieved this goal with revenues only approaching 20% of 2019 levels. The amount doesn’t even factor in the impact of excess payroll costs due to the grant from the Payroll Support Program, which required the airline to keep all employees on the payroll while only flying 10% of 2019 capacity for most of Q2.

Delta now forecasts breakeven cash burn rates by year end. The airline isn’t even optimistic about a surge in traffic.

Liquidity Machine

The airline ended Q2 with $15.7 billion of cash and cash equivalents on the balance sheet, with additional access to a $4.6 billion loan via the U.S. Treasury from the CARES Act. The airline now has too much liquidity for a forecast of average daily cash burn rates in the $15 million range for the rest of the year. The airline might only burn $2.5 billion the rest of the year.

While Delta didn’t even forecast a bullish end to the year, the airline should end the year with up to $12.5 billion in cash plus access to other loans. Previously, it wasn’t clear whether the company had enough cash to survive the COVID-19 crisis, now it might have too much cash.

The airline suggested that the $15 billion raised since March has a blended interest rate of only 5.5%. At such a rate, Delta is paying an incredible $825 million for access to cash the airline doesn’t need.

Naturally, excess cash isn’t necessarily a bad thing considering the risk surrounding weak travel in the sector. Ultimately though, Delta is spending over $200 million a quarter on additional interest costs, with a large portion of that debt unnecessary.

For the airline to return to 2019 levels, Delta needs to cut interest expenses dramatically. Delta earned $7.31 in 2019, so even similar traffic levels in 2021 would see the EPS cut to $6.00 based on these higher interest expenses.

Takeaway

The key investor takeaway is that Delta Air Lines is a cheap stock, with the company now boasting plenty of cash to survive the current weak traffic environment. As treatments improve or a vaccine becomes available, passengers will return to flying at 2019 levels. At $26.25, the stock is just too cheap with normalized EPS potential of $6-plus.

Out of 11 total analyst reviews published in the last three months, 8 analysts rated the stock a Buy, while 3 said Hold. Meanwhile, the $37.80 average price target suggests shares could rise 44% in the next twelve months. (See DAL stock-price forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclosure: No position.

In this episode of MarketFoolery, Chris Hill chats with Motley Fool analyst Bill Barker about the latest news from Wall Street. They discuss an all-stock buyout in the oil and gas sector. And there is news of a spinoff, as an e-commerce giant continues with its shedding of nonco

Image source: The Motley Fool.

Image source: The Motley Fool.

(RTTNews) - The Indonesia stock market headed south again on Wednesday, one session after it had ended the two-day slide in which it had dropped almost 50 points or 1 percent. The Jakarta Composite Index remains just above the 5,110-point plateau although it's expected to move h

The Tesla (TSLA) juggernaut stops for no one. The week began with another stellar performance, as Tesla shares surged by 9.5% in Monday July 20’s session.

The reason behind the latest rally? It’s Tesla, is any other reason needed? Joking aside, Monday was a good day all around, with growth stocks in particular on the rise, so that might provide some explanation.

Another explanation for the surge might be this week’s Q2 earnings report. Tesla will release its latest quarterly statement on Wednesday July 22 after market close, and investors might be piling in on the hope that Tesla can deliver another estimate-beating performance.

There’s even more at stake this time around, as a fourth consecutive profitable quarter will finally make Tesla eligible for inclusion in the S&P 500 index – the standard for overall market performance. With a market cap of $290.9 billion, Tesla is currently the largest company ever to not be included in the S&P 500. As an aside, it should be noted that at its current valuation, Tesla is deemed to be worth almost five times more than General Motors and Ford - combined.

Ahead of the report, Wedbush analyst Daniel Ives believes Tesla’s chance of gaining inclusion is “already considered a fait accompli among the bulls.”

Ives, who also thinks Tesla will post a profit, said, “Tesla, facing a dark macro backdrop and COVID storm clouds, has executed flawlessly this quarter, posting 90,000 deliveries and crushing Street expectations in Aaron Judge-like home run fashion. The key focus for investors heading into this print will be: 1) 2Q profitability, 2) China delivery trajectory, 3) Model 3 demand outlook for 2H, and 4) any hints around Battery Day announcements slated for late September.”

For now, however, Ives keeps a Neutral rating on Tesla along with a $1,250 price target. Therefore, the 5-star analyst expects shares to decline by 20%. (To watch Ives’ track record, click here)

According to the rest of the analyst community, there is more downside in the cards. The Street’s average price target is $969.42, which implies shares could drop by 38% over the next 12 months. Based on 6 Buys, 11 Holds and 10 Sells, the analyst consensus currently rates Tesla a Hold. (See Tesla stock analysis on TipRanks)

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(RTTNews) - The Singapore stock market headed south again on Wednesday, one session after it had snapped the three-day slide in which it had dropped almost 35 points or 1.2 percent. The Straits Times Index now rests just beneath the 2,600-point plateau although it may bounce hig

Northfield Bancorp (NFBK) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.15 per share. This compares to earnings of $0.17 per share a year ago. These figures are adjusted for non-recurring items.

Icon PLC (ICLR) came out with quarterly earnings of $1.20 per share, beating the Zacks Consensus Estimate of $1.10 per share. This compares to earnings of $1.69 per share a year ago. These figures are adjusted for non-recurring items.

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(RTTNews) - The Malaysia stock market has alternated between positive and negative finishes through the last four trading days since the end of the three-day slide in which it had stumbled more than 30 points or 2 percent. The Kuala Lumpur Composite Index now rests just above th

Helix Energy (HLX) came out with quarterly earnings of $0.04 per share, beating the Zacks Consensus Estimate of a loss of $0.02 per share. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items.