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Delta Air Lines (DAL) Scales 52-Week High: More Room to Run?
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Shares of Delta Air Lines (DAL - Free Report) scaled a new 52-week high of $43.16 on Jun 16, before closing the session a tad lower at $42.79.
DAL has a market capitalization of $27.5 billion currently. Shares of the company has risen 30.2% year to date compared with the industry's 27% rise.
Image Source: Zacks Investment Research
Let’s delve into the reasons behind the impressive price performance and explore factors that are likely to drive further upside.
Upbeat air travel demand is a huge positive for Delta. Driven by this, total revenues increased 36.49% on a year-over-year basis in first-quarter 2023. With air travel demand likely to swell further this summer, the company expects June-quarter revenues (adjusted) to increase in the 15-17% band from second-quarter 2022 actuals.
Operating margin for full-year 2023 is expected in the 10-12% range. Adjusted earnings per share are anticipated to be between $5 and $6. Free cash flow is estimated to exceed $2 billion in 2023. Apart from buoyant air-travel demand, declining fuel costs are likely to boost Delta’s prospects.
Delta’s liquidity position is also encouraging. The airline ended first-quarter 2023 with cash and cash equivalents of $6,611 million, much higher than the current maturities of debt and financial lease of $2,136 million. Delta's environment-friendly approach is commendable.
Highlighting its financial strength, management recently announced the reinstatement of Delta’s practice of paying quarterly dividends after a COVID-induced hiatus. Delta’s board of directors approved a quarterly dividend payment of 10 cents per share. The renewed dividend will be paid on Aug 7, 2023, to all shareholders of record as of Jul 17, 2023.
Copa Holdings is benefiting from an improvement in air-travel demand. In first-quarter 2023, passenger revenues increased 28.5% from first-quarter 2019 levels due to higher yields.
CPA’s focus on its cargo segment is encouraging. In first-quarter 2023, cargo and mail revenues grew 51.8% from first-quarter 2019 levels on higher cargo volumes and yields.
Copa Holdings' fleet modernization and cost-management efforts are commendable. The Zacks Consensus Estimate for current-year earnings has been revised 22.4% upward over the past 60 days.
Global Ship Lease is being aided by the bullish sentiment surrounding the containership market. GSL’s strong balance sheet is an added positive. An uptick in trading volumes bodes well for GSL.
The Zacks Consensus Estimate for current-year earnings has moved up 4.2% over the past 60 days. GSL outpaced the Zacks Consensus Estimate for earnings in each of the last four quarters, the average beat being 15.64%.
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Delta Air Lines (DAL) Scales 52-Week High: More Room to Run?
Shares of Delta Air Lines (DAL - Free Report) scaled a new 52-week high of $43.16 on Jun 16, before closing the session a tad lower at $42.79.
DAL has a market capitalization of $27.5 billion currently. Shares of the company has risen 30.2% year to date compared with the industry's 27% rise.
Image Source: Zacks Investment Research
Let’s delve into the reasons behind the impressive price performance and explore factors that are likely to drive further upside.
Upbeat air travel demand is a huge positive for Delta. Driven by this, total revenues increased 36.49% on a year-over-year basis in first-quarter 2023. With air travel demand likely to swell further this summer, the company expects June-quarter revenues (adjusted) to increase in the 15-17% band from second-quarter 2022 actuals.
Operating margin for full-year 2023 is expected in the 10-12% range. Adjusted earnings per share are anticipated to be between $5 and $6. Free cash flow is estimated to exceed $2 billion in 2023. Apart from buoyant air-travel demand, declining fuel costs are likely to boost Delta’s prospects.
Delta’s liquidity position is also encouraging. The airline ended first-quarter 2023 with cash and cash equivalents of $6,611 million, much higher than the current maturities of debt and financial lease of $2,136 million. Delta's environment-friendly approach is commendable.
Highlighting its financial strength, management recently announced the reinstatement of Delta’s practice of paying quarterly dividends after a COVID-induced hiatus. Delta’s board of directors approved a quarterly dividend payment of 10 cents per share. The renewed dividend will be paid on Aug 7, 2023, to all shareholders of record as of Jul 17, 2023.
Zacks Rank & Key Picks
Delta currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Copa Holdings (CPA - Free Report) and Global Ship Lease (GSL - Free Report) . CPA currently sports a Zacks Rank #1 (Strong Buy) while GSL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings is benefiting from an improvement in air-travel demand. In first-quarter 2023, passenger revenues increased 28.5% from first-quarter 2019 levels due to higher yields.
CPA’s focus on its cargo segment is encouraging. In first-quarter 2023, cargo and mail revenues grew 51.8% from first-quarter 2019 levels on higher cargo volumes and yields.
Copa Holdings' fleet modernization and cost-management efforts are commendable. The Zacks Consensus Estimate for current-year earnings has been revised 22.4% upward over the past 60 days.
Global Ship Lease is being aided by the bullish sentiment surrounding the containership market. GSL’s strong balance sheet is an added positive. An uptick in trading volumes bodes well for GSL.
The Zacks Consensus Estimate for current-year earnings has moved up 4.2% over the past 60 days. GSL outpaced the Zacks Consensus Estimate for earnings in each of the last four quarters, the average beat being 15.64%.