Air Canada (TSX:AC) Stock Could DOUBLE by 2022: Here’s How

The new Omicron variant sent shares of Air Canada (TSX:AC) stock falling yet again, but it’s a great time for Motley Fool investors to jump on the stock!

| More on:
An airplace on a runway

Image source: Getty Images.

Air Canada (TSX:AC) keeps setting up progress, and the COVID-19 virus keeps knocking it down. During its latest quarter, even management announced it was in post-pandemic recovery. Air Canada stock wouldn’t be providing any more net cash burn data in the future. And that future looked bright.

Enter Omicron

But then came the Omicron variant. Suddenly, the future looked far less certain, sending shares downwards. Air Canada stock fell 9% with news of a new variant. What’s worse, shares continue to fall — not at a huge rate, but they’re definitely falling.

The main issue with this new variant is that we still aren’t sure whether the vaccines currently in distribution will cover Omicron. That being said, the companies have come out stating that the vaccine could be easily adjusted. So, that’s something.

The problem remains, however, that everyone who had already received both doses would have to go back yet again to receive a new vaccine. It remains unclear as to whether the variant could be covered by the booster currently being distributed in Canada.

All of these question marks are hard to swallow when it comes to Air Canada stock. But news will come out eventually, and that’s when Air Canada stock could double.

Doubling instead of dropping

The dip in Air Canada stock could be a great time to get in before it continues back to at least $25 per share. And it will reach those share prices again. This is a short-term problem that long-term Motley Fool investors shouldn’t fret so much about. Here’s why.

During the last earnings report, several pieces of information came forward for long-term investors to consider. First, Air Canada stock returned the remaining government aid in favour of its own financing agreement of $7.1 billion. This is on its own terms. So, it’s not like Omicron will suddenly leave the stock stranded.

Further, Air Canada stock saw revenue nearly triple year over year during its last report. While it’s still down from 2019 levels, bookings are at 2019 levels and rising. This comes from an increase in air traffic from further vaccinations, but also with holiday travel. That increase in seating capacity rose 87% year over year. Again, still down from 2019, but it’s getting there.

When it comes to the new variant, nothing really has changed. All employees are still fully vaccinated. Safety measures, including both mandatory and spot testing, remain in place. Once investors realize this, shares could start climbing. Furthermore, should Air Canada stock reach 2019 revenue levels in the new year, share could easily double!

Foolish takeaway

I’m not going to sugarcoat it: Air Canada stock remains volatile. New variants are likely to come up for years. But Air Canada stock believes we’ll be post-pandemic by 2024 at the latest rather than the original 2025. This is supported by health research as well.

And this new drop in share price could be just the opportunity Motley Fool investors were looking for when considering Air Canada stock. Should the company hit a revenue boost in the new year, shares could double to $40 per share before you know it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of AIR CANADA. The Motley Fool has no position in any of the stocks mentioned.

More on Coronavirus

eat food

Goodfood Stock Doubles Within Days: Time to Buy?

Goodfood (TSX:FOOD) stock has surged 125% in the last few weeks, so what happened, and should investors hop back on…

Read more »

stock data
Tech Stocks

If I Could Only Buy 1 Stock Before 2023, This Would Be It

This stock is the one company that really doesn't deserve its ultra-low share price, so I'll definitely pick it up…

Read more »

Aircraft Mechanic checking jet engine of the airplane

Air Canada Stock Fell 5% in November: Is it a Buy Today?

Air Canada (TSX:AC) stock saw remarkable improvements during its last quarter but still dropped 5% with more recession hints. So,…

Read more »

Airport and plane

Is Air Canada Stock a Buy Today?

Airlines are on the rebound. Does Air Canada stock deserve to be on your buy list?

Read more »

A patient takes medicine out of a daily pill box.

Retirees: 2 Healthcare Stocks That Could Help Set You up for Life

Healthcare stocks offer an incredible opportunity for growth for those investors who look to the right stocks, such as these…

Read more »

sad concerned deep in thought

Here’s Why I Just Bought WELL Health Stock

WELL Health stock (TSX:WELL) may be a healthcare stock and a tech stock, but don't let that keep you from…

Read more »

healthcare pharma

WELL Stock: The Safe Stock Investors Can’t Afford to Ignore

WELL stock (TSX:WELL) fell 68% from peak to trough, and yet there's no good reason as to why. So now…

Read more »

telehealth stocks
Tech Stocks

The Ultimate Growth Stock to Buy With $100 Right Now

After climbing 600%, this growth stock is now down 68%. But it won't be long before other investors catch on.

Read more »