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Delta Air Lines (DAL) Stock Worth Betting on Now: Here's Why
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Delta Air Lines (DAL - Free Report) is benefiting from an uptick in air travel demand (particularly on the leisure front). The upsurge in passenger volumes makes DAL stock an attractive investment opportunity currently.
Let’s delve deep to unearth the factors working in favor of the Zacks Rank #2 (Buy) stock.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings has been revised 6.83% and 7.59% upward over the past 60 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Buoyant Air Travel Demand & Other Tailwinds: Improvement in air travel demand bodes well for DAL. Owing to this, management issued a bullish outlook at the company’s Investor Day presentation for second-quarter and full-year 2023. 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 band.
Delta now expects adjusted earnings per share to be between $2.25 and $2.50 for second-quarter 2023. The earlier expectation was in the range of $2-$2.25. Backed by strong booking trends for summer, the company expects June-quarter revenues (adjusted) to increase in the 17-18% band from second-quarter 2022 actuals. Operating margin for full-year 2023 is expected to be at the top end of the 10-12% range.
Delta has also decided to resume payment of quarterly dividend, highlighting its pro-investor stance. The restrictions under the CARES Act prohibited airlines from paying dividends or buying back shares till Sep 30, 2022. DAL’s liquidity position is also impressive.
Impressive Price Performance: Driven by the rosy air-travel-demand scenario, shares of DAL have gained 42.1% year to date against its industry’s appreciation of 33.6%.
Image Source: Zacks Investment Research
Bullish Industry Rank: The industry, to which DAL belongs, currently has a Zacks Industry Rank of 40 (of 250 plus groups). Such a solid rank places the company in the top 16% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, an ordinary stock in a strong group is likely to outperform a robust stock in a weak industry. Therefore, taking the industry’s performance into consideration becomes imperative.
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 comparable 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 the company’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 38.25% upward in the past 60 days.
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Delta Air Lines (DAL) Stock Worth Betting on Now: Here's Why
Delta Air Lines (DAL - Free Report) is benefiting from an uptick in air travel demand (particularly on the leisure front). The upsurge in passenger volumes makes DAL stock an attractive investment opportunity currently.
Let’s delve deep to unearth the factors working in favor of the Zacks Rank #2 (Buy) stock.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings has been revised 6.83% and 7.59% upward over the past 60 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Buoyant Air Travel Demand & Other Tailwinds: Improvement in air travel demand bodes well for DAL. Owing to this, management issued a bullish outlook at the company’s Investor Day presentation for second-quarter and full-year 2023. 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 band.
Delta now expects adjusted earnings per share to be between $2.25 and $2.50 for second-quarter 2023. The earlier expectation was in the range of $2-$2.25. Backed by strong booking trends for summer, the company expects June-quarter revenues (adjusted) to increase in the 17-18% band from second-quarter 2022 actuals. Operating margin for full-year 2023 is expected to be at the top end of the 10-12% range.
Delta has also decided to resume payment of quarterly dividend, highlighting its pro-investor stance. The restrictions under the CARES Act prohibited airlines from paying dividends or buying back shares till Sep 30, 2022. DAL’s liquidity position is also impressive.
Impressive Price Performance: Driven by the rosy air-travel-demand scenario, shares of DAL have gained 42.1% year to date against its industry’s appreciation of 33.6%.
Image Source: Zacks Investment Research
Bullish Industry Rank: The industry, to which DAL belongs, currently has a Zacks Industry Rank of 40 (of 250 plus groups). Such a solid rank places the company in the top 16% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, an ordinary stock in a strong group is likely to outperform a robust stock in a weak industry. Therefore, taking the industry’s performance into consideration becomes imperative.
Other Stocks to Consider
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 comparable 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 the company’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 38.25% upward in the past 60 days.