DAL stock retreated Wednesday following a morning surge after Delta Air Lines cleared first-quarter earnings estimates. A broad group of airline stocks reversed lower Wednesday after leading the S&P 500 in early trade.
Delta Air Lines reported an 80% increase in adjusted Q1 earnings to 45 cents per share. Revenue rose 6% to $12.6 billion, marking a record for Q1.
FactSet analysts expected earnings to increase 44% to 36 cents per share on 5.7% revenue growth to $12.52 billion.
The company noted that corporate travel demand accelerated with managed corporate sales increasing 14% year-over-year. Meanwhile, domestic unit revenues rose 3% year-over-year to a record for the March quarter.
Delta maintained its full-year earnings outlook between $6 and $7 per share, compared to FactSet forecasts of $6.45 per share. The airline guided 2024 free cash flow between $3 billion and $4 billion.
For the second quarter, Delta expects earnings to range from $2.20 to $2.50 per share, down from $2.68 per share reported last year. Delta expects 5% to 7% revenue growth for Q2. The guidance was in-line with analyst earnings estimates of $2.22 per share on 5.5% revenue growth to $15.41 billion.
UBS last Thursday initiated coverage of Delta with a buy rating and $59 price target. The firm is bullish on the airline, noting potential margin upside in 2024 and 2025 due to moderating cost pressures in the second half of the year and an inflection in unit revenues, according to a research note reported by The Fly. UBS recommends buying DAL stock now ahead of the upcoming multi-quarter period of margin expansion.
Delta Air Lines Stock
DAL stock slid 2.3% Wednesday after surging 4.2% in premarket trading. The stock is trading just below a 49.20 buy point for a 39-week cup-with-handle base.
Delta Air Lines has trended higher since mid-January and rallied 14.9% so far this year through Wednesday's close.
Rival United Airlines fell 2.5% Wednesday to fall back below its 50-day line. The stock advanced 2% in the morning to test that level. UAL gained 2.7% in 2024.
American Airlines retreated 3.9% Wednesday after swinging 2.8% higher premarket. AAL stock is 6% from its 200-day line after sliding below that level on April 3. American Airlines stock eased 2.4% year-to-date.
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