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With a market cap of $33.3 billion, Delta Air Lines, Inc. (DAL) holds a prominent position in the U.S. aviation market with its Airline and Refinery segments, supported by an extensive global network and diverse service offerings. The airline giant is expected to announce its fiscal Q3 earnings on Thursday, Oct. 10.
Ahead of the event, analysts are expecting DAL to report a profit of $1.59 per share, down 21.7% from $2.03 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in three of the last four quarterly reports while missing on one occasion.
Moreover, the company’s adjusted EPS of $2.36 failed to surpass its consensus estimate marginally in the last quarter, driven by excess industry capacity, which dampened airfares at the low end of the market.
For fiscal 2024, analysts expect Delta Air Lines to report EPS of $6.26, up marginally from $6.25 in fiscal 2023. Looking further, its EPS is expected to rise 16.5% annually to $7.29 in fiscal year 2025.
DAL has outperformed the broader markets in 2024, with shares up 28.1% on a YTD basis versus the S&P 500 Index's ($SPX) 20.3% gain and the S&P 500 Industrial Sector SPDR’s (XLI) 18.3% gain over the same time frame.
Strong travel demand, driven by a consumer shift from goods to services, has enabled Delta Air Lines to outperform the broader market this year. Besides, the airline’s proactive measures to expand and upgrade its fleet are praiseworthy.
However, on Jul. 11, DAL shares closed down more than 3% after reporting its Q2 earnings results. While it surpassed its topline projections, it failed to meet its bottom-line expectations. Delta increased its capacity by 8% year-over-year in Q2, and for Q3 2024, it expects capacity growth of 5% to 6% and revenue growth of 2% to 4%. Corporate travel demand has also surged, with 90% of companies projecting stable or increased travel volumes in the upcoming quarter.
Analysts' consensus rating on Delta Air Lines stock is bullish, with a "Strong Buy" rating overall. The stock has a unanimous “Strong Buy” rating from all 20 analysts covering it.
The average analyst price target for DAL is $59.89, indicating a potential upside of 16.2% from the current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
