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Can Delta Air Lines (DAL) Stock Fly Higher After Strong Q4 Results?

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Recently hitting new 52-week highs after posting strong Q4 results last Friday, investors may be wondering if it’s time to buy Delta Air Lines (DAL - Free Report)  stock for more upside.

As the largest domestic airline stock by market cap ($42.01 billion), Delta’s operational and financial performance has set the company apart from many of its main competitors such as American Airlines (AAL - Free Report)  and Southwest Airlines (LUV - Free Report) .

Let’s see if higher highs are in store for Delta’s stock after achieving a record year in terms of revenue.

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Delta’s Strong Q4 Results

Thanks to a strong holiday travel season, Delta reported record Q4 sales of $15.6 billion which rose 9% year over year and topped estimates of $14.98 billion. Even better, Q4 EPS of $1.85 spiked 44% from $1.28 a share in the comparative quarter and eclipsed expectations of $1.76 by 5%.

Overall, Delta’s total sales spiked 6% in fiscal 2024 to a record $61.6 billion although annual earnings dipped to $6.16 per share versus EPS of $6.25 in 2023.  

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Delta’s EPS Guidance & Outlook

Adding momentum to Delta’s stock was that the company expects strong travel demand to continue into 2025. Notably, Delta expects more than 19% EPS growth in FY25 with the current Zacks Consensus rising nicely in the last week to estimates of $7.43 or 20% growth.

Based on Zacks estimates, Delta’s bottom line is expected to expand another 9% in FY26 to $8.13 per share. Plus, FY26 EPS estimates are up in the last week as well.

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This comes as Delta’s total sales are projected to slightly dip this year to $61.37B but are forecasted to rebound and rise 6% in FY26 to $64.93B.

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DAL Performance & Valuation Comparison

Continuing its sharp post-pandemic rebound, Delta’s stock has soared over +70% in the last year. This has widely outperformed the broader indexes and its aforementioned peers American and Southwest Airlines but has trailed United Airlines' (UAL - Free Report)  surge of +170%.

That said, Delta’s more attractive price tag of $66 a share may appeal to long-term investors with UAL trading over $100.

Zacks Investment Research
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Furthermore, DAL still trades at just 8X forward earnings which is on par with UAL and slightly beneath their Zacks Transportation-Airline Industry average while offering a sharp discount to the S&P 500’s 21.9X.

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Bottom Line

For now, Delta’s stock lands a Zacks Rank #3 (Hold) after such an extensive rally over the last year. However, it would be no surprise if a buy rating is on the way and new highs given the trend of positive EPS revisions.

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