In case you didn’t notice, long-grounded airline stocks took flight in May. From May 15 to June 8, the U.S. Global Jets ETF (NYSEARCA:JETS) — which is comprised of the market’s biggest airline stocks — rallied more than 80%.

The catalyst? The great U.S. economic reopening, which sparked consumer behavior normalization and laid the foundation for a meaningful uptick in air travel over the past few weeks.

To be sure, airline stocks have gone in reverse over the past week on fears of a “second wave” of the novel coronavirus. The JETS ETF has shed nearly 20% since June 8.

However, investors would be wise to ignore these “second wave” fears.

That’s not say a second wave of Covid-19 isn’t coming. It is. But it it to say that: 1) this second wave won’t be that big because we are better prepared today than we were in February to handle a pandemic, and 2) the second wave won’t derail the economic rebound, because “cabin fever” consumers are ready to go out and explore the world again (even if Covid-19 isn’t entirely gone).

Broadly, then, today’s improving air travel trends will continue to improve for the foreseeable future — even in the face of a second wave of the coronavirus. This is especially true as we head into the summer vacation season. In fact, according to a recent Overseas Leisure Group survey, about three-fourths of Americans are already planning their next vacation.

With that in mind, the five best airlines stocks to buy as consumers start traveling again are:

• Delta (NYSE:DAL)
• Southwest (NYSE:LUV)
• JetBlue (NASDAQ:JBLU)
• United Airlines (NASDAQ:UAL)
• American Airlines (NASDAQ:AAL)

So, let’s dive in.

Airline Stocks to Buy: Delta (DAL)

As one of the world’s largest air carriers, Delta is in a natural position for its growth trends to meaningfully improve as we head into the summer season and consumers start traveling again.

In addition, Delta stock is simply too cheap to ignore here.

Sure, the company’s profit growth prospects going forward will be hurt by lower margins, bigger spending on cleaning and a lack of buyback power. But a fundamental rebound in air travel demand will more than offset those headwinds, and help guide DAL stock higher from here.

My base case is for Delta’s revenues to get wiped out in 2020, strongly recover in 2021 and return to 2019 levels by 2022. That said, though, this would imply $47 billion in 2022 sales. Pre-tax profit margins will similarly get killed in 2020, recover strongly in 2021 and hit steady state levels by 2022 — with those steady state levels being below 2019 levels. In 2019, pre-tax profit margins were just north of 13%. That said, I see them hovering around 10% going forward.

Assuming so, you’re talking about $4.7 billion in pre-tax profits in 2022. Taking out 23% for taxes and assuming a 630 million diluted share count (roughly equivalent to today’s share count), that equates to about $5.75 in earnings per share (EPS). Based on a historically-normal eight-times forward earnings multiple, that implies a 2021 price target for DAL stock of over $45.

Shares trade hands just over $30, meaning there is plenty of upside left for DAL stock. With all of that in mind, Delta should be on your radar moving forward.

Southwest (LUV)

One of the best airline stocks to buy now is Southwest for one very simple reason: domestic air travel demand will rebound and fully recover well before international air travel demand does.

Southwest is a domestic airline carrier. Southwest’s revenues were around $22.4 billion in 2019. Of those, about 97% were from low-cost, domestic flights. Those are the exact type of flights which will start filling up well before premium, international flights start filling up.

If we assume that global air travel demand will look fairly normal by 2022 — after we have a vaccine and Covid-19 is an old memory — then Southwest air travel demand could look pretty normal by 2021, and entirely normal by 2022.

Consequently, Southwest could be back at around $22 billion in revenues in 2022. Profit margins will depress from their 13% levels in 2019 thanks to higher cleaning costs. However, a return to full capacity should enable Southwest to recover to nearly 10% operating margins.

On those assumptions, I’m modeling for Southwest to net $3.50 in EPS by 2022. Based on a historically average 12-times forward earnings multiple, that equates to a 2021 price target for LUV stock of over $40.

So, collectively, LUV stock is another one to keep an eye on.

JetBlue (JBLU)

Much like Southwest, JetBlue an ideal airline stock to buy here and now because of its low-cost, domestic flight focus.

Roughly 70% of JetBlue’s revenues were domestic. All revenues came from North/South America travel, as the company has zero exposure to cross-Atlantic and/or cross-Pacific flights.

Accordingly, JetBlue’s revenues and profits will recover and normalize with impressive speed over the next few quarters.

My thinking is that JetBlue’s 2022 revenues should be exactly where they were in 2019 (around $8 billion). I also believe that pre-tax profit margins will rebound to 7.5% — which is below their nearly 10% 2019 levels due to higher cleaning costs, but still up from current levels due to regained capacity.

Assuming so, then my modeling suggests that JetBlue can do about $1.70 in EPS by 2022.

And based on a historically average 10-times forward earnings multiple, that equates to a 2021 price target for JBLU stock of $15 — making it another airline stock to uy.

United Airlines (UAL)

Given its global footprint, United Airlines may take longer to reach peak 2019 capacity than Southwest or JetBlue. That said, however, that’s already priced into the stock. And at current levels, UAL stock is as good a buy as any airline stock today.

Of course, United’s revenues will fall hard in 2020. Then, they’ll rebound strongly in 2021, and sustain that recovery in 2022. Fiscal 2022 revenues should come in around $40 billion, representing roughly about 90% capacity relative to the $43 billion in 2019 revenues. That difference is accounted for by marginal loss of international business and personal travel.

At the same time, United’s pre-tax profit margins will get whacked in 2020, before recovering in 2021 and 2022. Importantly, steady-state profit margins going forward will be lower than 2019 profit margins because of higher costs associated with more thorough and regular cleaning. I’m looking for about 7% pre-tax profit margins in 2022, versus 9%-plus in 2019.

Under those assumptions — as well as the assumption that United’s share repurchase program grinds to a halt — my modeling suggests that $8 in EPS is doable by 2022. Based on a historically average eight-times forward earnings multiple, that implies a 2021 price target for UAL stock of $64.

Shares trade hands below $40 today, making UAL stock a value.

American Airlines (AAL)

Last, but least, on this list of airline stocks to buy is American Airlines.

Much like United and Delta, American is a big airline operator whose stock is in a position to head meaningfully higher over the next few quarters as improving growth trends converge on a significantly discounted valuation.

My base case model on American Airlines assumes a few things.

First, traffic and revenue are killed in 2020, before rebounding strongly in 2021 and almost fully normalizing by 2022, with some loss of business and personal travel. I’m modeling for 2022 revenues of $40 billion, versus 2019 revenues of $46 billion.

Second, profit margins will drop hard in 2020 as well. They rebound slightly in 2021 and 2022, but remain below 2019 levels due to extra costs associated with more cleaning. Pre-tax profit margins hit 5% by 2022, versus 6%-plus in 2019.

Third, American Airlines’ buyback program essentially grinds to a halt. In turn, the company’s share count in 2022 will be roughly equivalent to its current share count.

Under those assumptions, I see American Airlines netting about $3.50 in EPS by 2022. Based on a historically average seven-times forward earnings multiple, that equates to a 2021 price target for AAL stock of nearly $25.

The stock trades hands around $16 today, meaning it has plenty of room to run.