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Delta (DAL) Stock Rises on Encouraging Q2 and 2023 Guidance
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Shares of Delta Air Lines (DAL - Free Report) appreciated 6.84% on Jun 27 to close the trading session at $46.09 per share. A favorable outlook issued by management at the company’s Investor Day presentation for second-quarter and full-year 2023 resulted in this uptick.
The Projections
Management now anticipates full-year adjusted earnings to be $6 per share, which is in line with the top end of its previous expectation in the $5-$6 range. The company attributes this positive outlook to strong air travel demand. The Zacks Consensus Estimate for current-year earnings is currently pegged at $5.63 per share.
Delta now expects adjusted earnings per share to be in the range of $2.25 to $2.50 for the second quarter of 2023. The earlier expectation was in the range of $2 to $2.25. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at $2.11 per share. Delta also raised its revenue outlook for the second quarter, expecting growth between 17% and 18%, higher than the previous range of 15% to 17%. Operating margin for the second quarter is expected to be 16%.
Delta also raised its estimate for free cash generation in 2023 to $3 billion from $2 billion. The company now expects current-year operating margin at the top end of the 10-12% range expected previously. For full-year 2023, the company has increased its revenue growth outlook to a range of 17% to 20%, compared with the earlier forecast of a 15% to 20% increase.
For fiscal 2024, the airline still expects earnings per share to exceed $7 and free cash flow of more than $4 billion. It also foresees an operating margin of 13% to 15%.
This positive forecast indicates Delta's confidence in its ability to generate higher profitability and returns on investments. The raised revenue outlook for the second quarter and the fiscal year reflects the airline's expectation of sustained strong demand and improved financial performance. Investors may perceive this positive guidance as a favorable indicator of Delta's prospects, potentially influencing the company's stock price. However, it's important to consider the potential impact of external factors on the airline industry.
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 the first quarter of 2019 on higher cargo volumes and yields.
Copa Holdings' fleet modernization and cost-management efforts are commendable as well. The Zacks Consensus Estimate for CPA’s current-year earnings has been revised 25.08% upward over the past 60 days.
Allegiant is seeing a steady recovery in leisure air travel demand. In first-quarter 2023, this Las Vegas, NV-based company’s operating revenues grew 29.9% on a year-over-year basis. Passenger revenues, accounting for 93.7% of the top line, increased 31.3% on a year-over-year basis.
Allegiant's fleet modernization efforts are encouraging. The Zacks Consensus Estimate for ALGT's current-year earnings has been revised 30.95% upward in the past 60 days.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Delta (DAL) Stock Rises on Encouraging Q2 and 2023 Guidance
Shares of Delta Air Lines (DAL - Free Report) appreciated 6.84% on Jun 27 to close the trading session at $46.09 per share. A favorable outlook issued by management at the company’s Investor Day presentation for second-quarter and full-year 2023 resulted in this uptick.
The Projections
Management now anticipates full-year adjusted earnings to be $6 per share, which is in line with the top end of its previous expectation in the $5-$6 range. The company attributes this positive outlook to strong air travel demand. The Zacks Consensus Estimate for current-year earnings is currently pegged at $5.63 per share.
Delta now expects adjusted earnings per share to be in the range of $2.25 to $2.50 for the second quarter of 2023. The earlier expectation was in the range of $2 to $2.25. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at $2.11 per share. Delta also raised its revenue outlook for the second quarter, expecting growth between 17% and 18%, higher than the previous range of 15% to 17%. Operating margin for the second quarter is expected to be 16%.
Delta also raised its estimate for free cash generation in 2023 to $3 billion from $2 billion. The company now expects current-year operating margin at the top end of the 10-12% range expected previously. For full-year 2023, the company has increased its revenue growth outlook to a range of 17% to 20%, compared with the earlier forecast of a 15% to 20% increase.
For fiscal 2024, the airline still expects earnings per share to exceed $7 and free cash flow of more than $4 billion. It also foresees an operating margin of 13% to 15%.
This positive forecast indicates Delta's confidence in its ability to generate higher profitability and returns on investments. The raised revenue outlook for the second quarter and the fiscal year reflects the airline's expectation of sustained strong demand and improved financial performance. Investors may perceive this positive guidance as a favorable indicator of Delta's prospects, potentially influencing the company's stock price. However, it's important to consider the potential impact of external factors on the airline industry.
Zacks Rank & Other Key Picks
Delta currently carries a Zacks Rank #2 (Buy). Investors interested in the Zacks Airline industry may also consider stocks like Copa Holdings (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. 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 the first quarter of 2019 on higher cargo volumes and yields.
Copa Holdings' fleet modernization and cost-management efforts are commendable as well. The Zacks Consensus Estimate for CPA’s current-year earnings has been revised 25.08% upward over the past 60 days.
Allegiant is seeing a steady recovery in leisure air travel demand. In first-quarter 2023, this Las Vegas, NV-based company’s operating revenues grew 29.9% on a year-over-year basis. Passenger revenues, accounting for 93.7% of the top line, increased 31.3% on a year-over-year basis.
Allegiant's fleet modernization efforts are encouraging. The Zacks Consensus Estimate for ALGT's current-year earnings has been revised 30.95% upward in the past 60 days.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.