On Thursday, Delta Air Lines (NYSE:DAL) retained its Buy rating and a price target of $59.00, as reiterated by TD Cowen. The firm's stance comes ahead of the airline's third-quarter earnings report, which is scheduled to be released before the market opens on October 10, 2024.
TD Cowen updated its estimates for Delta Air Lines last month following the company's guidance revision. The firm's projections are now aligned with the market consensus for revenue and are slightly lower for earnings per share (EPS), referencing FactSet data. However, the firm anticipates higher than consensus revenue growth, EBIT margin, and EPS for the fourth quarter.
The key areas of focus for the upcoming earnings report include pricing trends, corporate travel, premium demand, and industry capacity. These factors are critical in assessing the company's performance and future outlook in the competitive airline industry.
Delta Air Lines has been navigating a complex market environment, and the forthcoming earnings report is expected to provide valuable insights into the company's operational and financial health. With the Buy rating and price target reaffirmed by TD Cowen, investors will be looking closely at the upcoming earnings release to gauge the company's trajectory.
The airline sector continues to experience shifts in demand and operational challenges, and Delta's performance in these key areas will be indicative of its adaptability and resilience. As the date for the earnings call approaches, the market awaits to see how Delta Air Lines measures up to the expectations set forth by analysts and industry experts.
In other recent news, Delta Air Lines has seen a flurry of activity. Citi reaffirmed a Buy rating on Delta's stock, adjusting earnings per share (EPS) estimates based on improved third-quarter 2024 revenue and a reduction in non-operating expenses.
Citi also revised its estimated costs per available seat mile excluding fuel for the years 2025 and 2026. Meanwhile, TD Cowen has maintained its Buy rating and $59.00 price target for Delta, despite the airline's anticipated revenue shortfall of $380 million for the current quarter due to a software update disruption.
Delta also provided an investor update at the Morgan Stanley Laguna Conference, discussing various operational and financial aspects. The U.S. Department of Transportation has initiated an investigation into the loyalty programs of major airlines, including Delta. In response to rising tensions in the Middle East, Delta has suspended flights between New York and Tel Aviv until the end of the year.
On a broader scale, labor unions across various industries in the United States have been increasingly assertive. This includes strikes and negotiations involving major companies like General Motors (NYSE:GM), Ford (NYSE:F), Stellantis (NYSE:STLA), United Parcel Service (NYSE:UPS), FedEx (NYSE:FDX), Boeing (NYSE:BA), American Airlines (NASDAQ:AAL), Delta Air Lines, United Airlines Holdings (NASDAQ:UAL), Spirit Airlines (NYSE:SAVE), JetBlue Airways (NASDAQ:JBLU), and Spirit AeroSystems (NYSE:SPR).
InvestingPro Insights
As Delta Air Lines prepares to release its third-quarter earnings, InvestingPro data offers additional context to TD Cowen's analysis. The company's P/E ratio of 6.89 and adjusted P/E ratio of 7.59 for the last twelve months as of Q2 2024 suggest that Delta is trading at a relatively low earnings multiple. This aligns with an InvestingPro Tip indicating that Delta is "trading at a low P/E ratio relative to near-term earnings growth."
The company's revenue growth of 7.84% over the last twelve months as of Q2 2024 supports TD Cowen's projection of higher than consensus revenue growth. Additionally, Delta's operating income margin of 9.95% for the same period may provide insight into the EBIT margin expectations mentioned in the article.
InvestingPro Tips also highlight that 6 analysts have revised their earnings upwards for the upcoming period, which could be relevant to the upcoming earnings report on October 10, 2024. This positive sentiment is further reinforced by the tip that analysts predict the company will be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide valuable insights into Delta Air Lines' financial health and market position.
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