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Bull of the Day: Delta Air Lines (DAL)

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With slumping oil prices, a number of industries in the broader transportation world look to benefit. One that should definitely come to mind in this type of environment is the airline space. This area tends to see a sizable percentage of its costs go to fuel, so a reduced—or at least stable—oil price should be great news for this segment.

We have definitely seen airline companies bounce back in recent months, partially as a result of these lower oil prices, though a stronger U.S. economy isn’t hurting matters either. No wonder the industry currently has an industry rank in the top 5%, and why not a single stock in the group has a Zacks Rank #5 (Strong Sell), out of nearly two dozen companies.

But which company do you want to focus on in this impressive group?

Well, one that might deserve a closer look is Delta Air Lines (DAL - Free Report) . This might be one of the best positioned in the space, at least if we look to earnings estimate revisions as a guide.

Recent Estimates

In the last two months, analysts covering Delta stock have been raising their estimates for the company’s earnings, almost universally. We have seen five estimates go higher in the current quarter, and six go higher for the current year time frame.

This has also helped to boost the consensus estimate for DAL stock, as we have seen the current quarter projection increase by 3.8% in the past two months and over 7% for the next quarter. The full year estimate has moved higher by over five percent in the same time frame, and analysts now expect year-over-year growth for the company on the earnings front too.

The most recent estimates on DAL stock have also been higher, and the company has a great history in earnings season and can clearly live up to expectations on a regular basis. In fact, Delta has only missed earnings estimates once in the past three years, so it certainly has a good track record.

Delta Air Lines, Inc. Price, Consensus and EPS Surprise

Delta Air Lines, Inc. Price, Consensus and EPS Surprise | Delta Air Lines, Inc. Quote

No wonder DAL has earned itself a Zacks Rank #1 (Strong Buy) rating, and why we are looking for more strength out of this name in the near future too.

Bottom Line

There are numerous reasons to like the airline group right now. The economy is strong, oil prices are stable, and the industry faces relatively little pricing pressure thanks to an intense period of mergers a few years ago.

But while there are many quality companies in the space, one that should be on your radar above all others right now is Delta. The company has great prospects on the earnings estimate revision front, a strong value score, and is a ‘strong buy’ rated stock too. So, if you are looking for an airline stock to ride in your portfolio, definitely give DAL a closer look this summer.


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