Delta Air Lines: Strong Q1 Earnings and Bullish Q2 Outlook Justify Buy Rating and Raised Price Target

Bank of America Securities analyst Andrew Didora has reiterated their bullish stance on DAL stock, giving a Buy rating today.

Andrew Didora has given his Buy rating due to a combination of factors impacting Delta Air Lines’ performance and future prospects. The airline’s reported earnings per share (EPS) for the first quarter of 2024 were at the upper end of the guidance range, and the company’s guidance for the second quarter EPS exceeded both the consensus and Didora’s forecast. This positive outlook was supported by better-than-expected unit revenue and unit cost projections, leading Didora to adjust his 2024 EPS estimate to $6.81, close to the high end of Delta’s $6-7 forecast. The analyst’s confidence in the airline’s outlook also prompted an increase in the price objective from $53 to $55.

The report indicates that domestic and corporate demand are driving revenue improvements, which is a significant factor for Delta’s robust financial health. The company expects to see record corporate revenues in the second half of 2024, reflecting a strong recovery. Additionally, Delta’s operational efficiency and investments in fleet health, resulting in lower maintenance-related cancellations, suggest improved cost control. Moreover, Delta’s commitment to debt reduction, with plans to repay at least $4 billion in 2024, is seen as a prudent strategy that may enhance its valuation, justifying a premium compared to other network carriers. These elements collectively underpin Didora’s optimistic view of Delta Air Lines and his reaffirmation of a Buy rating.

In another report released today, Barclays also maintained a Buy rating on the stock with a $52.00 price target.

Based on the recent corporate insider activity of 56 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DAL in relation to earlier this year.

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Delta Air Lines (DAL) Company Description:

Georgia-based Delta Air Lines, Inc. is one of the major airlines of the United States and a legacy carrier. The company provides scheduled air transportation for passengers and cargo. It operates through the Airline and Refinery segments.