Air Canada’s (TSX:AC) stock has received an upgrade on hopes that the airline will benefit as the global economy reopens in this year’s second half.
TD Securities has upwardly revised its view of Air Canada’s stock, stating that rising vaccination rates will lead to more normal travel patterns in coming months.
In a note to clients, TD Securities said the stock’s current $25 price provides an attractive entry point, giving the stock a "buy" rating from a "hold" rating previously, and forecasting a $30 price target in 12 months’ time.
"We believe that declining COVID-19 cases in Canada and a rapidly increasing proportion of the population that is vaccinated will be positive for sentiment towards the stock," said TD Securities. "We anticipate that these factors will unleash pent up demand for domestic and select international flights driving bookings (deposits) significantly higher."
The global pandemic has ravaged Air Canada, with revenue in its most recent quarter plunging 80% year-over-year amid travel restrictions and stay-at-home orders. The company’s share price has been cut in half since last January as the pandemic ravaged the travel and tourism industries.
