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24.02.202111:56 Forex Analysis & Reviews: Aeroflot stocks drop

Good afternoon, deal colleagues.

Air transportation companies and airlines have been significantly damaged by the coronavirus pandemic. They have been suffering the largest losses. Bans imposed on international and domestic transport have led to a slump in the stocks of airlines. Some of them dropped to their lowest levels for the first time in many years. Stocks of the Aeroflot company also tumbled and the company faced significant losses. In the fourth of 2020, the company showed a really poor performance.

Its income declined by 59.2% compared to the fourth quarter in 2019. The cost of sales decreased by 39.9%. In 12 months, the revenue slid by 58.4%. As a result, the company lost 30.972 million rubles. However, in the fourth quarter, the volume of cargo transportation soared by 55.6%.

At the same time, the number of international flights was gradually rising, thus, reducing the company's losses. Moreover, the company took significant measures to lower expenses. As a result, this indicator dropped by 37.2% in 2020. At the same time, the governmental support measures allowed the company to save its highly-qualified personnel. In the second part of the previous year, the company received additional income, including money from the cargo transportation.

Now, when the whole world, especially developed countries, has launched mass vaccination programs, Aeroflot has all chances to revive its performance. It may even pay dividends at the end of 2021. According to the positive scenario, if the number of international and domestic flights gradually recovers, the company's stocks will also rise.

At the moment, most indicators are showing bad performance. However, it is a state-owned company and 82% of its shares belong to the government. This means that the government may support the company by means of financial aid, lucrative projects, and other bonuses.

At the moment, stocks of most international airlines are advancing after they reached the bottom. Thus, for example, stocks of DELTA AIR LINES have added 18.73% since January 2021. JAPAN AIRLINES securities jumped by 21.1% whereas stocks of CHINA SOUTHERN AIRLINES grew by 10.39%. At the same time, securities of DEUTSCHE LUFTHANSA AG increased by 5.59% whereas stocks of Aeroflot inched down by 3.06%.

If the worst is in the past, the company's stocks may rise despite negative technical factors. The rise may reach its highest speed in the second half of the year. Aggressive investors may even start buying these stocks. At the same time, those who prefer cautious trading are likely to open positions, if the price closes a week above 74.50 rubles per share. At the same time, economists suppose that the price will return to 90 rubles by the end of the year. However, the negative scenario is also possible. It is better to close positions, if the price closes a week below 55 rubles per share. Be attentive and follow the money management rules.

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

Daniel Adler,
Analytical expert of InstaSpot
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