Jim Cramer: I Don't Want to Buy Airline Stocks

Author:
Publish date:
Video Duration:
44

Airline stocks are surging Tuesday.

The reason? Investors are taking hope in the easing of travel restrictions enacted to slow the spread of the coronavirus pandemic.

UBS analyst Myles Watson said in a note to clients that he was upgrading the Dallas air carrier to buy from neutral "as we see a clearer path for domestic travel recovery."

"Moreover, unlike many other airlines, the balance sheet position of LUV is remarkably clean (near-net cash balance sheet), which provides protection from any step backward in demand under another wave of covid-19," said Watson, who also raised his price target from $37 to $41 a share.

This follows governments easing travel bans. Spain said it intended to lift a two-week quarantine on foreign visitors from July 1, while Germany said recently it would lift its border controls on June 15.

And the German government said it would offer Deutsche Lufthansa AG a $9 billion bailout deal.

So, will we need to see the U.S. airlines get a bigger bailout deal?

Jim Cramer said expect more big moves and when it comes to the stocks, he's staying away. Watch why in the video above. 

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here. 

Watch More of the Latest Videos from TheStreet and Jim Cramer

Related Videos