Shares of Air Canada (TSX:AC) fell 9% on Friday as a new COVID-19 variant posed a new risk for the markets and the state of an economic recovery. At just over $21 a share, the las time Air Canada's stock was trading this low was back in February. Although it's not quite at a 52-week low, this could present a buying opportunity for investors. Earlier in the month, the stock was trading at well over $26.
This comes as the company is coming off an incredibly strong third-quarter performance where its operating revenue of $2.1 billion for the period ending Sept. 30 was nearly triple the $757 million that it reported in the same period last year. While it is still operating at a loss, at just $364 million, it was less than half the $785 million operating loss it incurred in the prior-year period. And with unrestricted liquidity of $14.4 billion, the company is in excellent shape to whether any storm related to COVID-19 in the foreseeable future.
Air Canada has been a popular stock for investors betting on an economic recovery as its shares were trading at more than $50 in early 2020 before the pandemic first began. There's certainly the potential for the stock to double from where it is today as the economy recovers and the airline benefits from pent-up travel demand.
The airline's improved results should inspire some much-needed confidence in the stock and while it may still be a long road ahead, Air Canada looks like a solid buy on the dip.
