Delta Air Lines (NYSE:DAL) stock scores a Strong Buy consensus rating on TipRanks ahead of its Q1 FY24 results. This S&P 500 (SPX) company is one of the oldest and among the four largest air carriers in the U.S. Delta is scheduled to report its first-quarter results on Wednesday, April 10, 2024.
The Street expects Delta to post adjusted earnings of $0.35 per share on revenue of $12.47 billion. In the prior-year quarter, Delta reported adjusted earnings of $0.25 per share on revenue of $11.84 billion (excluding refinery sales).
Delta Airlines flies nearly 200 million travelers to over 280 destinations across six continents, with up to 4,000 daily departures. Investors are anticipating the stock to soar to pre-pandemic levels, with improvement expected in profitability, load factor, and total revenue per available seat miles (TRASM). DAL stock has gained 35.6% in the past year, thanks to increased demand for air travel. Nevertheless, DAL stock trades below its pre-pandemic highs.
Wall Street is Highly Optimistic About Delta’s Revival
Ahead of Delta’s Q1 print, Wall Street analysts are raving about the company’s potential revival to the peak levels.
Last week, Morgan Stanley analyst Ravi Shanker boosted DAL’s price target to $85 (84.5% upside) from $77 while keeping a Buy rating. Shanker is encouraged by Delta’s push as a more premium air carrier, which will enable it to draw higher revenues as travel demand remains robust.
Similarly, Jefferies analyst Sheila Kahyaoglu lifted DAL’s price target to $58 (25.9% upside) from $55 and reiterated a Buy rating. The analyst is equally excited about Delta’s strategic shift toward a premium consumer mix.
Likewise, TD Cowen analyst Helane Becker maintained a Buy rating on Delta stock with an unchanged price target of $49 (6.4% upside). The analyst expects Delta Air Lines to be one of the few air carriers to record a profit in the quarter and cited management’s comment about meeting the high-end of its revenue guidance.
Becker also noted that management was bullish about a revival in corporate traffic. The analyst said that she would be monitoring some key metrics like premium cabin spend and cash income from credit card partner American Express (NYSE:AXP). However, the analyst is concerned about the impact of rising fuel costs and high maintenance charges on the bottom line.
Is Delta Stock a Good Buy?
With 13 unanimous Buy ratings, DAL stock commands a Strong Buy consensus rating on TipRanks. The average Delta Air Lines price target of $55.50 implies 20.5% upside potential from current levels.
Ending Thoughts
Delta currently trades at a P/E (price/earnings per share) ratio of 6.42x, significantly below the sector average of 24.90x. The stock is relatively cheaper and has the potential to outgrow competition in the long run. Moreover, analysts are highly optimistic about Delta Air Lines’ recovery to pre-pandemic levels.
