Delta Records Sky-High Earnings
Outline
Delta Air Lines ascended to new heights in Q1 2024, surpassing expectations and achieving record-breaking quarterly revenue. The airline's strategic focus on operational excellence and growth initiatives, coupled with a rebounding travel market, moved it beyond even the most optimistic projections from analysts.
This impressive start to the year underscores the airline's resilience and agility in navigating the volatile airline industry, setting a promising trajectory for the rest of the year ahead.
Detailed Overview
The airline's earnings report has delivered an 8% year-over-year surge in operating revenue to $13.748bn and adjusted operating revenue reaching $12.563bn. The company's adjusted earnings per share (EPS) of $0.45 exceeded expectations by $0.09. As Delta continues its commitment to debt reduction, aiming to repay at least $4bn by the end of this year, the positive outlook updates from prominent credit rating agencies affirm its trajectory towards sustainable growth and long-term value creation.
Delta Air Lines has solidified its position in the aviation sector, and is well-positioned for continued growth and increased shareholder value. Looking ahead, Delta expects to see second-quarter revenue growth of 5%–7%, EPS of $2.20 – $2.50, and an operating margin of 14%–15%. For the full year, Delta anticipates non-GAAP EPS of $6–$7, and free cash flow (FCF) of $3–4bn.
Delta’s share price has experienced growth in recent months, with its value increasing from $30 to around $48 per share, increasing by over 50% in less than six months. Year to date, the stock has risen by 17%. Technical analysis reveals bullish momentum, as the stock is trading well above its 50-day and 200-day simple moving averages (SMAs), signalling a strong upward trend. The MACD further supports this bullish sentiment.
Analysts, including those from Bank of America Securities and Morgan Stanley predict further upside potential for Delta Air Lines stock, with a collective average price target of $64, suggesting a potential upside of 32.64%.
*This article was prepared by BROKSTOCK analyst Maboko Seabi.
**This information does not constitute financial advice of any nature whatsoever. The decision to invest, and the suitability of any investment choice is solely your responsibility.
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