Why Delta Air Lines Stock Is Under Pressure Today

Delta Air Lines Stock Falls As EU Is Reportedly Ready To Introduce Travel Restrictions On U.S. Travellers

Shares of Delta Air Lines found themselves under pressure after recent reports indicated that EU may reintroduce coronavirus-related travel restrictions on travellers from U.S.

According to the reports, the reason for this decision is the active spread of the Delta variant of coronavirus in the U.S. As a result, the average U.S. infection rate exceeded the average EU infection rate.

The move would be a major blow to hopes for global travel normalization. The spread of the Delta variant has already put some pressure on the industry. Airline stocks have been moving lower since early June, and the new developments may serve as an additional bearish catalyst.

What’s Next For Delta Air Lines Stock?

Earnings estimates for Delta Air Lines have moved a bit lower in recent weeks but remained close to levels seen at the beginning of August. Analysts expect that the company will report a loss of $3.48 per share this year and a profit of $4.32 per share in the next year, so the stock is trading at less than 10 forward P/E which is certainly cheap in the current market environment.

However, traders will likely focus on the spread of the Delta variant in the upcoming weeks. It is already clear that the the surge of the Delta variant may have an impact on demand and other countries’ travel-related decisions.

In this light, it remains to be seen whether Delta Air Lines stock will be able to gain upside momentum in the near term. The company’s valuation remains attractive, but coronavirus-related worries may put more pressure on the stock. The recovery of business travel and international travel is likely postponed due to the surge of the Delta variant, and the stock needs stabilization on the virus front for sustainable upside.

For a look at all of today’s economic events, check out our economic calendar.

Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks continued their ascent on Wednesday, with all three of the major indices closing in the green. It was a big day for the S&P 500, which saw the 4,500 level for the first time, even if it closed slightly below that milestone while still in record territory. The Dow Jones Industrial Average closed up nearly 40 points while the Nasdaq set its second all-time high in as many days.

The gains were fueled by optimism that the economic recovery is on track with the tailwind of Pfizer’s FDA-approved COVID-19 vaccine.

Stock index futures held their own on Wednesday evening, suggesting that the good times could continue to roll on Thursday.

Stocks to Watch

  • Salesforce shares are up nearly 2% in extended-hours trading on the heels of the company’s quarterly results, which included growing revenues and robust margins. Salesforce also completed its acquisition of messaging platform Slack. The company also raised its earnings and revenue outlook for fiscal year 2022.
  • Shares of sporting goods retailer Dick’s Sporting Goods rallied 13% thanks to record quarterly results. Dick’s also announced a special dividend on top of a higher regular distribution and bolstered its share repurchase program.
  • DraftKings was up more than 6% on the day. The sports-betting platform got a boost after Cathie Wood of ARK Invest became increasingly bullish on the stock. As sports betting becomes legal in more states, DraftKings could be poised to benefit for the long term. ARK’s Wood scooped up more than USD 60 million of DKNG shares. She is also bullish on Tesla, Roku, and cryptocurrency exchange Coinbase, among other stocks.
  • Williams-Sonoma shares are climbing 12% higher in after-hours trading. The retailer’s Q2 earnings surpassed Wall Street estimates and provided an upbeat revenue forecast. Williams-Sonoma also lifted its quarterly dividend by 20% to USD 0.71 per share. The company is facing some supply chain issues but it did not get in the way of the stock’s rally.
  • Delta Air Lines is requiring its employees to be vaccinated or they will face a USD 200 monthly payment for health benefits.

Look Ahead

The Fed’s Jackson Hole meeting will get underway on Friday. Investors are anxiously awaiting a glimpse into Chairman Jerome Powell’s thinking on asset purchases and consumer prices.

Stalling Signs? Taking a Look Under the Hood of US Equities

Greetings. I hope this article finds you and yours well. Today, we are taking a look at some additional market indicators and internals to get an unbiased perspective on things.

First, I want to preface things by mentioning that I am not suggesting that I am fully bearish on the S&P 500 or stocks right now. However, I am taking more of a cautious stance at the moment.

 

Figure 1 – S&P 500 Index April 15, 2021 – July 21, 2021, Daily Candles Source stockcharts.com

Nothing new to see here. Just another pedestrian pullback to the 50-day SMA and a bounce back. This pattern has repeated itself several times since the pandemic lows in the $SPX. It won’t repeat itself forever – that would be too easy.

Since it is earnings season, let’s talk earnings multiples.

Feeling bullish? It can be challenging to get excited about an $SPX at 4400 with an estimated 46.40 P/E ratio (trailing twelve months). We are in the middle of earnings season, so we will have a clearer figure soon.

Figure 2 – S&P 500 PE Ratio 1870 – July 22, 2021. Source multpl.com

Stocks are not cheap by any measure, folks. However, with easy monetary policy and low rates, this is to be expected. What could be the catalyst to derail this freight train?

How about the Dow Transports? This index used to be talked about much more frequently and is followed closely by students of Dow Theory. We just don’t hear much analysis about it on Fox Business, CNBC, or Bloomberg these days.

The Dow Transports (Dow Jones Transportation Average) $TRAN is an index comprised of 20 companies.

Here are the index components and weighting as of December 2020:

Alaska Air Group, Inc. 2.55%

American Airlines Group Inc. 0.76%

Avis Budget Group, Inc. 1.80%

C.H. Robinson Worldwide, Inc. 4.61%

CSX Corporation 4.39%

Delta Air Lines, Inc. 1.94%

Expeditors International of Washington, Inc. 4.61%

FedEx Corporation 13.10%

J.B. Hunt Transport Services, Inc. 6.70%

JetBlue Airways Corporation 0.70%

Kansas City Southern 9.73%

Kirby Corporation 2.51%

Landstar System, Inc. 6.60%

Matson, Inc. 2.79%

Norfolk Southern Corporation 11.42%

Ryder System, Inc. 3.12%

Southwest Airlines Co. 2.26%

Union Pacific Corporation 9.91%

United Airlines Holdings, Inc. 2.11%

United Parcel Service, Inc. 8.39%

Figure 3- Dow Jones Transportation Index January 4, 2021 – July 21, 2021, Daily Candles Source stockcharts.com

Here, and in contrast to the Dow Jones Industrial Average, we can see that the Transports topped back on May 10, 2021. Proponents of Dow Theory would argue that this creates a lack of confirmation and that the subsequent highs in the Dow Jones Industrial Average are not valid due to this lack of confirmation.

What could be the reason for the stall in the Transports? Input Costs? While fuel costs have risen, what about the rise in retail spending? Is the stimulus-powered consumer pocket not enough to counterbalance the rising input costs?

If input costs are the reason for the stalling, what about the other companies that rely on raw materials to make their products? Recent inflationary data has not affected these companies’ stock prices yet (for the most part).

What if the Fed eases off the gas pedal?

While it is very difficult (if not impossible) to pick market tops (and I don’t advocate trying to do that), it is wise to look at certain market indicators to get an understanding of what is going on beneath the surface.

It is easy to look at the chart of the $SPX and see that it is moving higher, from the bottom left-hand corner of the chart to the top right-hand corner. However, that does not tell the whole story of what is happening in the US equity markets.

We will be monitoring the above and previously mentioned market internals and indicators for more clues in the coming days, weeks, and months. I think it is critical to be aware of metrics such as the above as the broader indices trade near all-time highs.

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For a look at all of today’s economic events, check out our economic calendar.

Rafael Zorabedian
Stock Trading Strategist

Sunshine Profits: Effective Investment through Diligence & Care

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Increase In Covid Cases Cause Airline Stocks To Plunge

The shares of some major airline companies in the United States are down at Monday’s pre-market trading session thanks to a surge in the number of Coronavirus cases in the country.

UAL, AAL And DAL All Trading In The Red

Delta Air Lines (DAL), American Airlines and United Airlines are all in a bearish mode today thanks to the news of a surge in the number of Covid cases in the United States. At Monday’s pre-market trading session, the shares of United Airlines are down by 5%, with American Airlines also down by roughly 5% at the time of this report.

UAL stock chart. Source: FXEMPIRE

Delta Air Lines is also not left out, as the stock is down by 4.1% over the past few hours. The companies’ stocks were performing excellently in recent weeks, thanks to the rapid vaccination program put in place by the Biden administration. Travel demand has increased in recent months, with the Transportation Security Administration recording over 2 million passengers at US airports yesterday. This is the highest Covid level recorded since February 2020, weeks before the pandemic hit the United States.

Delta Variant Is Spreading

The concern amongst travelers is the spread of the Delta variant of Covid-19. The Delta Covid variant has become the dominant strain in the United States, and this is affecting the broader stock market. However, travel and hospitality stocks are usually the most affected, with airlines and hotels suffering the most over the past few months.

Following the increase in the Delta variant, some regions in the United States are reinstating some of the earlier lifted restrictions. Los Angeles, for instance, has reinstated the indoor mask mandate while the Southern Nevada Health District is asking people to also wear masks indoors as the cases increase across the state.

AAL stock chart. Source: FXEMPIRE

Year-to-date, both American Airlines and United Airlines have performed excellently. AAL began the year trading at $15 per share, but it is now up by 20% and is currently trading above $18. UAL began the year trading at $41, but after a period of growth, it is now consolidating and trades just above the $43 mark.

Delta Airlines on Road to Recovery; Target Price $58

Delta Airlines, one of the major players in the United States aviation industry, reported a profit for the first time since late 2019 in the second quarter as federal relief helped cover losses.

The Airline company which provides scheduled air transportation for passengers and cargo reported posted a profit of $652 million. The airless company said a quarterly adjusted loss came in at $1.07​​ per share, better than the Wall Street consensus estimate of $1.36​​ per share loss.

The Atlanta-based airline said its revenue for the three months ended June 30 fell to $7.13 billion, down from the $12.54 billion seen in the same period a year ago. However, that was higher than the market consensus estimates of $6.22 billion.

At the time of writing, Delta Airlines shares traded 2.51% higher at $41.69 on Thursday.

Analyst Comments

Delta Airlines’ (DAL) 2Q print, 3Q guide and more importantly, mgmt. commentary on key themes like corporate, international and costs show that the recovery remains on track (and may be running closer to the bull case). This establishes a good baseline for the rest of Airlines earnings season,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“3Q guidance compares well to MSe and cons. 3Q capacity is expected to be down 28-30% (vs. MSe 29%), revenues down 30-35% (vs. MS/cons down 36/34%) vs. 2019. Mgmt guided to positive MSD pre tax margins for the September quarter despite what management characterized as good guy cost inflation items related to ramping up capacity which runs counter to normal seasonality (3Q CASMxF +11-14% vs. MSe +8.4%). However, mgmt. reiterated the target of CASMxF below 2019 levels by December and said 4Q would be positive pretax as well. CEO Bastian said that they are not seeing any impact of the new COVID variant on booking trends so far.”

Delta Airlines Stock Price Forecast

Twelve analysts who offered stock ratings for Delta Airlines in the last three months forecast the average price in 12 months of $58.00 with a high forecast of $73.00 and a low forecast of $45.00.

The average price target represents a 38.13% change from the last price of $41.99. From those 12 analysts, ten rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $73 with a high of $96 under a bull scenario and $35 under the worst-case scenario. The firm gave an “Overweight” rating on the airlines’ stock.

Several other analysts have also updated their stock outlook. Bernstein raised the target price to $65 from $64. The Goldman Sachs Group increased their price target to $47 from $35 and gave the stock a neutral rating. Deutsche Bank raised shares to a buy rating from a hold rating and set a $55 price objective.

Check out FX Empire’s earnings calendar

Why Delta Stock Is Up By Almost 4% Today

Delta Stock Rebounds After Analyst Upgrade

Shares of Delta Air Lines are gaining ground today after Raymond James raised its rating to Strong Buy with a price target of $58.

Yesterday, Delta Air Lines released its second-quarter results, reporting revenue of $7.13 billion and GAAP earnings of $1.02 per share. On an adjusted basis, Delta Air Lines reported a loss of $1.07 per share. The company managed to beat analyst estimates on both earnings and revenue.

In its report, Delta Air Lines stated that domestic leisure travel had fully recovered to 2019 levels. In addition, Delta Air Lines indicated that there were encouraging signs of improvement in business and international travel.

Importantly, Delta Air Lines did not witness any reductions in demand due to the Delta variant of coronavirus, which is back into spotlight due to the rising number of new coronavirus cases in the U.S.

Delta Air Lines also noted that it was profitable in June and that it expected that it would be profitable in the second half of 2021.

What’s Next For Delta Stock?

Analyst estimates for Delta’s 2021 earnings have been mostly flat in recent weeks. Currently, analysts expect that Delta Air Lines will report a loss of $3.78 per share in 2021.

Meanwhile, analyst estimates for 2022 earnings have been moving higher, and analysts expect that Delta Air Lines will report earnings of $4.06 per share in 2022. At current price levels, the stock is trading at roughly 10 forward P/E, which is an attractive level in the current market environment.

The key question in the near term is whether the Delta variant of coronavirus will have a notable impact on the recovery of the airline industry. While Delta Air Lines noted that it saw no impact on bookings, the situation could be more challenging on the international front as few countries have a successful mass vaccination program.

In case traders manage to ignore coronavirus-related risks, Delta Air Lines stock will have a good chance to rebound from current levels due to attractive valuation and strong domestic demand for air travel.

For a look at all of today’s economic events, check out our economic calendar.

Marketmind: It’s Jay Time!

Inflation in the world’s top economy barrelling ahead for a third straight month has doused the equity rally, just as stocks were staging a come-back after navigating last week’s bond market volatility.

Powell will face questions on how transitory price pressures might be and how fast the Fed might need on withdrawing the monetary support which has been critical for markets.

Wednesday’s figures prompted markets to bring forward the timing of the Fed’s first rate hike, bets that lifted the dollar to a three-month high versus the euro and a one-week high versus the yen.

An added complication was weak demand at Wednesday’s auction of 30-year Treasury bonds, which pushed 10-year yields above 1.4%. And after a softer Wall Street close, Asian stocks fell while European and U.S. markets are tipped to open lower.

Price pressures are a hot topic elsewhere too, with data showing British inflation rising further above the Bank of England’s target, hitting 2.5%.

Some central banks, meanwhile, are going full steam ahead with stimulus withdrawal plans — New Zealand announced a halt to its pandemic-linkd QE programme. Bets on a rate hike this year have sent the Kiwi dollar surging 1%.

Later in the day, the Bank of Canada is also expected to announce plans to taper asset purchases.

Key developments that should provide more direction to markets on Wednesday:

-UK inflation jumps to 2.5% in June

-Bank of Canada expected to taper

-New Zealand c.bank ends bond purchases, paves way for possible rate hikes

-Turkey, Chile and Croatia central bank meetings

-India WPI inflation

-Swedish CPI

-Euro Area Industrial Production

-ECB Board Member Isabel Schnabel speaks

-Bank of England Deputy Governor Dave Ramsden speaks

-Auctions: German 10-year Bund

-Earnings: Citi, BofA, BlackRock, Wells Fargo, Delta Airlines

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Karin Strohecker; editing by Sujata Rao)

Earnings to Watch Next Week: Most Big U.S. Banks, PepsiCo, Delta Air Lines and UnitedHealth in Focus

Earnings Calendar For The Week Of July 12

Monday (July 12)

Ticker Company EPS Forecast
FRHC Freedom $0.72

 

Tuesday (July 13)

IN THE SPOTLIGHT: JPMORGAN, PEPSICO, GOLDMAN SACHS

JPMorgan: The New York City-based multinational investment bank and financial services holding company is expected to report its second-quarter earnings of $3.16 per share, which represents year-over-year growth of over 128% from $1.38 per share seen in the same quarter a year ago.

In the last four consecutive quarters, on average, the company has delivered earnings surprise all four times, with of over 32%.

JPM has less excess capital as a % of the market cap relative to other names in the group, which drives a lower benefit from buybacks. We are valuing the group on normalized 2023 EPS. We expect a V-shaped recovery will drive higher reserve release and share buybacks over the next 2 years, with “normalized” post-recession earnings beginning in 2023,” noted Betsy Graseck, equity analyst at Morgan Stanley.

“We see more upside elsewhere in the group, particularly in consumer finance stocks which have been under more pressure. This drives our Underweight rating.”

PEPSICO: The Harrison, New York-based global food and beverage leader is expected to report its second-quarter earnings of $1.53 per share, which represents year-over-year growth of over 15% from $1.32 per share seen in the same quarter a year ago.

The U.S. multinational food, snack, and beverage corporation would post revenue of $17.91 billion. In the last four consecutive quarters, on average, the company which holds approximately a 32% share of the U.S. soft drink industry has delivered an earnings surprise of over 6%.

GOLDMAN SACHS: The New York-based leading global investment bank is expected to report its second-quarter earnings of $9.52 per share, which represents year-over-year growth of over 52% from $6.26 per share seen in the same quarter a year ago.

It is worth noting that in the last two years, the world’s leading investment manager has surpassed market consensus expectations for profit and revenue most of the time. The better-than-expected number would help the stock hit new all-time highs.

“Our 2Q EPS est. increases to $10.05 from $9.53 on positive markets and higher equity investment revs. The equity investment line will likely again be a meaningful rev. swing factor (we model $1.4B vs. $3.1B in 1Q21). Post-DFAST, GS indicated that the dividend will increase to $2.00/qtr. from $1.25/qtr., but did not provide specifics on buybacks. We model 2Q share repurchase of $1.5B (vs. $2.2B cons.) and $2.5B/qtr. (vs.$2.3B/qtr. cons.) for the remainder of this year,” noted Daniel T. Fannon, equity analyst at Jefferies.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 13

Ticker Company EPS Forecast
FAST Fastenal $0.41
CAG Conagra Foods $0.52
JPM JPMorgan Chase $3.16
PEP PepsiCo $1.53
GS Goldman Sachs $9.96
FRC First Republic Bank $1.73
HCSG Healthcare Services $0.30
AMX America Movil Sab De Cv Amx $0.32

 

Wednesday (July 14)

IN THE SPOTLIGHT: WELLS FARGO, BANK OF AMERICA, CITIGROUP, DELTA AIR LINES, BLACKROCK

WELLS FARGO: The fourth-largest U.S. lender is expected to report a profit in the second quarter after last year posting its first loss since the global financial crisis of 20028.

Wells Fargo, Bank of America, Citigroup, JPMorgan will tother report profits of $24 billion in the second quarter, up significantly from $6 billion seen last year.

There is no relief for Delta Air Lines, which is expected to post a loss of $1.36 per share on $6.19 billion in revenue.

BLACKROCK: The world’s largest asset manager is expected to report its second-quarter earnings of $9.28 per share, which represents year-on-year growth of over 18% from $7.85 per share seen in the same quarter a year ago.

The New York-based multinational investment management corporation’s revenue would grow over 25% of $4.56 billion. In the last four consecutive quarters, on average, the investment manager has delivered an earnings surprise of over 11%.

The better-than-expected number would help the stock hit new all-time highs. The company will report its earnings result on Wednesday. BlackRock’s shares rose over 24% so far this year. The stock ended 2.83% higher at $901.31 on Friday.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 14

Ticker Company EPS Forecast
WFC Wells Fargo $0.95
BAC Bank Of America $0.77
PNC PNC $3.09
C Citigroup $1.99
DAL Delta Air Lines -$1.36
BLK BlackRock $9.28
INFY Infosys $0.17

 

Thursday (July 15)

Ticker Company EPS Forecast
WIT Wipro $0.07
WNS Wns Holdings $0.68
BK Bank Of New York Mellon $1.00
MS Morgan Stanley $1.66
CTAS Cintas $2.31
UNH UnitedHealth $4.43
USB US Bancorp $1.12
TFC Truist Financial Corp $0.98
HOMB Home Bancshares $0.46
AA Alcoa $1.28
VLRS Controladorauelaavcncv $0.80
PGR Progressive $1.07
TSM Taiwan Semiconductor Mfg $0.93
PBCT People’s United Financial $0.34
WAL Western Alliance Bancorporation $1.96

 

Friday (July 16)

Ticker Company EPS Forecast
ERIC Ericsson $0.13
ALV Autoliv $1.40
FHN First Horizon National $0.40
ATLCY Atlas Copco ADR $0.45
STT State Street $1.77
KSU Kansas City Southern $2.18
SCHW Charles Schwab $0.76

 

Delta Air Lines Shareholders Hit the Exits

Delta Air Lines Inc. (DAL) reports Q2 2021 earnings next week, with analysts expecting the carrier to post a loss of $1.43 per-share on $6.19 billion in revenue. If met, the loss-per-share would mark less than one-third of the red ink posted in the same quarter last year, which included the exit from the first lockdown. The stock dropped more than 10% in the week following April’s Q1 release, fueled by much-worse than expected earnings.

Business Travel Still Weak

The U.S. Transportation Security Administration screened 2,196,411 travelers on Friday July 2nd, higher than the 2,088,760 passing through those gates on the same day in 2019. Even so, Delta and other airlines sold off when they started the new trading week because leisure travelers comprised the vast majority of those bookings rather than business travel, which United Airline Holdings Inc. (UAL) recently reported as 60% lower than pre-pandemic levels.

Airlines are highly dependent on business travel and are waiting patiently for their return.  However, many analysts believe this segment will remain depressed for several years due to the lower cost of Zoom and other virtual meeting spaces. Not everyone agrees with this somber analysis, as evidenced by a recent industry-wide Wolfe Research upgrade, who is forecasting additional upside driven by a late summer business travel surge.

Wall Street and Technical Outlook

Wall Street consensus has grown more bullish in the last three months, posting an ‘Overweight’ rating based upon 12 ‘Buy’, 1 ‘Overweight’, and 9 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions. Price targets currently range from a low of $44 to a Street-high $73 while the stock is set to open Wednesday’s session on top of the low target. This humble placement suggests high levels of skepticism about Delta’s long-term outlook.

Delta topped out above 60 in January 2018 and failed four breakout attempts into 2020. It fell to a 7-year low during the pandemic decline and bounced in a rising channel that lost steam after mounting the 200-day moving average and reaching the .786 Fibonacci selloff retracement level in March 2021. The pullback into July has bounced along a trading floor at 43 while accumulation has dropped to a 9-month low. Sellers could easily take control in this bearish scenario, filling the Nov. 6 gap between 32 and 35.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Airline Bosses Call on Uk and U.s. To Lift Trans-Atlantic Travel Restrictions

After more than a year of restrictions, the CEOs of American Airlines, IAG unit British Airways, Delta Air Lines, United Airlines and JetBlue Airways Corp said high vaccination rates in both countries meant travel could restart safely.

The push for reopening trans-Atlantic routes on Monday comes ahead of meetings between U.S. President Joe Biden and British Prime Minister Boris Johnson at the G7 meeting of advanced economies later this week in Cornwall, southwest England, this week.

The pair must use those meetings to agree to restart travel, British Airways chief executive Sean Doyle said in a statement ahead of an online press conference.

“We urgently need them to look to the science and base their judgements on a proper risk analysis, allowing us all to benefit from the protection offered by our successful vaccine rollouts,” Doyle said.

Since March 2020, the United States has barred nearly all non-U.S. citizens who have been in the United Kingdom within the previous 14 days from entering the country. Most U.S. travellers visiting the United Kingdom must quarantine for 10 days upon arrival.

The need for a reopening is much stronger for Britain-based airlines British Airways and Virgin Atlantic which are not benefiting from a rebounding domestic market like their U.S. peers.

(Reporting by Sarah Young in London and David Shepardson in Washington; editing by Michael Holden)

Why Delta Stock Moved To Monthly Highs Today

Delta Air Lines Video 25.05.21.

Delta Stock Moves Higher As Demand For Leisure Travel Grows

Delta stock opened with a gap up today after the company stated that pent-up demand pushed forward bookings in the leisure segment beyond 2019 levels.

Business and international demand remain under pressure due to pandemic so airlines hope that strong domestic demand will boost their revenues during the summer season. Other airline stocks are also moving higher today as traders bet that summer months will bring strong results.

The successful mass vaccination program in the U.S. and strong stimulus provided by the government and the Fed, together with pent-up demand for “normal” life which includes vacations, served as main catalysts for strong demand in the leisure segment.

I’d note that some traders may be willing to speculate that the real rebound of the international travel may be coming soon as EU looks ready to present its vaccine passport in the upcoming weeks, although it remains to be seen whether the adoption of this passport will be fast enough to boost international sales during this summer season.

What’s Next For Delta Stock?

Delta stock has recently pulled back from yearly highs near the $52 level but the stock looks ready to gain more upside momentum ahead of the summer season.

Analysts expect that Delta will report a loss of $3.84 per share in 2021. The company is projected to return to profitability in 2022 with earnings of $4.00 per share. At current levels, Delta stock is trading at roughly 12 forward P/E which looks rather cheap compared to many peers.

I’d note that the market will likely focus on the pace of the recovery rather than on the company’s valuation in the upcoming months. If leisure travel is strong while demand for international and business travel shows real signs of life, the stock may move higher faster than analysts update their earnings estimates.

For a look at all of today’s economic events, check out our economic calendar.

Israel Looks to Back-Up Airport as Flight Cancellations Mount

By Sarah Young and Dan Williams

Palestinian militants have repeatedly shelled the Tel Aviv area during hostilities that erupted on Monday, raising safety concerns over Ben Gurion Airport, Israel’s main airport, and prompting it to reroute some flights to Ramon Airport, some 200 km (125 miles) to the south, which serves Eilat.

“The safety and security of our colleagues and customers is always our top priority, and we continue to monitor the situation closely,” British Airways said after cancelling its flights to and from Ben Gurion for Thursday.

Hamas militants in Gaza said they had launched a rocket at Ramon Airport on Thursday, but the Israel Airports Authority said that no rocket had struck Ramon and that it was operating as normal. The airport, which opened in 2019, can handle about 2 million passengers a year. It is connected by bus routes to the north, although there is no train service.

Its arrivals board showed several El Al Israel Airlines Ltd. flights from abroad that had been originally scheduled to land at Ben Gurion.

An Israeli official said the two airports were operating in sync. Ben Gurion was handling cargo, private and some other flights, and Ramon is “open for landing international commercial flights” and running scheduled domestic flights, he said.

Social media carried footage, purportedly taped by a passenger on an El Al flight from Brussels that was the first plane rerouted to Ramon, showing the view through the window of rockets being fired and intercepted over Tel Aviv. Reuters could not independently verify the footage.

UK-based Virgin Atlantic cancelled its flights to Tel Aviv for Wednesday and Thursday.

Spanish airline Iberia also cancelled its flight to Tel Aviv from Madrid on Thursday and back on Friday a spokeswoman said, while Germany’s Lufthansa also cancelled its flights.

“Due to the current situation in Israel, Lufthansa is suspending its flights to Tel Aviv until Friday, May 14,” the airline said.

Wizz Air said it had delayed its Thursday flight from Abu Dhabi to Tel Aviv until Friday.

Emirati carrier Flydubai said it was continuing to operate daily flights from Dubai to Tel Aviv. The airline was scheduled to operate three flights on Thursday, its website showed, while a fourth, night-time flight was cancelled.

United Airlines, Delta Air Lines and American Airlines on Wednesday all cancelled flights between the United States and Tel Aviv.

Virgin Atlantic had said earlier this week that bookings to Israel had soared 250% week on week after an announcement by Britain that Israel was on its “green list” for the reopening of overseas leisure travel during the COVID-19 pandemic.

But an explosion of violence, with fighting in Jerusalem and the Gaza Strip causing mounting civilian deaths, have made international airlines wary of the region.

Israel’s national airline El Al has said it was ready to operate additional planes to make up for shortfalls in foreign carriers.

British airline easyJet said that it was not yet cancelling its flights to Tel Aviv. Its next flight there is from Berlin and not scheduled until May 16, with a service from London Luton to Tel Aviv scheduled for May 18.

(Reporting by Sarah Young; Additional reporting by Inti Landauro in Madrid, Christoph Steitz in Frankfurt and Alexander Cornwell in Dubai; Editing by Michael Holden, Carmel Crimmins and Hugh Lawson)

Why Shares Of Delta Air Lines Are Down By 3% Today?

Delta Air Lines Video 15.04.21.

Delta Air Lines Stock Moves Lower After After Quarterly Report Misses Estimates

Shares of Delta Air Lines found themselves under pressure after the company released its quarterly report.

Delta Air Lines reported revenue of $3.6 billion and GAAP loss of $1.85 per share, missing analyst estimates on both earnings and revenue. The company noted that “acceleration in demand supported positive cash generation in the month of March”, which was a notable positive development given the current market environment.

Delta Air Lines also stated that it expected positive cash generation for the June quarter in case current trends remained intact. In addition, Delta Air Lines believes that it has a chance to return to profitability in the third quarter.

The company noted that current domestic leisure bookings have reached 85% of levels seen in 2019. Obviously, international travel remains under strong pressure, and the continued problems on this front hurt Delta Air Lines’ bottom line.

What’s Next For Delta Air Lines?

Shares of Delta Air Lines had a strong start of this year as investors bet that demand for air travel will rise fast. This increase in demand is seen in the domestic market thanks to the successful mass vaccination program, but the situation on the international front remains challenging.

The company managed to get back to positive cash generation in the last month of the quarter, but it looks that this was already priced in, and the market wanted to see stronger results. It should be noted that Delta Air Lines shares have moved closer to pre-pandemic levels in recent months, so investors will likely start to pay more attention to the company’s financial results.

While the company’s earnings report was somewhat disappointing, the stock has decent chances to get back to recent highs as the summer season will likely bring positive results in the domestic market segment.

For a look at all of today’s economic events, check out our economic calendar.

Delta Airlines to Report Loss in 2021, Unless There is Significant Recovery in Traffic: Cowen

Cowen and company in their latest report said they continue to believe that Delta Airlines will report a loss this year unless there is a significant recovery of international and corporate traffic in the second half, which seems highly unlikely amid the fourth wave of coronavirus infections.

The Airline company which provides scheduled air transportation for passengers and cargo throughout the United States and across the world is expected to report its first-quarter earnings on Thursday, April 15.

Delta Airlines would report a loss for the fifth consecutive time of $2.84 in the first quarter of 2021 as the airlines continue to be negatively impacted by the ongoing COVID-19 pandemic and renewed travel restrictions.  That would represent a year-over-year decline of over 450% from -$0.51 per share seen in the same quarter a year ago.

The Atlanta-based airline’s revenue would decline more than 50% to around $3.9 billion.

In 2020, Delta Airlines reported a full-year loss for the first time in 11 years as COVID-19 travel restrictions significantly dented air travel demand, but CEO Ed Bastian said he expects 2021 to be the year of recovery.

Delta Airlines’ shares, which slumped more than 40% last year, rose about 22% to $49.27 on Friday.

“We are reiterating our Market Perform rating on the common shares of Delta Air Lines. We are increasing our price target to $53 from $44, which is based on 8.2x 2023E EPS. These shares are currently selling at ~8.2x the 2023 consensus EPS estimate, a discount to peers with higher exposure to domestic leisure traffic and a slight premium to its own historical trading range. The shares are ~20% below their pre-pandemic highs, but 2021 revenues are forecast to be ~42% below 2019 levels suggesting these shares may take a break before heading higher,” noted Helane Becker, Cowen and Company.

“We do not expect revenues to get back to 2019 levels until 2023 at the earliest. Exposure to corporate and international travel will continue to weigh on near-term results. Jet fuel pricing has recovered faster than anticipated, weighing on bottom-line forecasts in the near-term vs previous estimates. We continue to expect Delta will not recover revenue to pre-pandemic levels before 2023, unless corporate and international traffic recovers sooner than anticipated.”

Delta Airlines Stock Price Forecast

Seventeen analysts who offered stock ratings for Delta Airlines in the last three months forecast the average price in 12 months of $53.94 with a high forecast of $72.00 and a low forecast of $42.00.

The average price target represents a 9.48% increase from the last price of $49.27. Of those 17 analysts, ten rated “Buy”, seven rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $72 with a high of $96 under a bull scenario and $35 under the worst-case scenario. The firm gave an “Overweight” rating on the airlines’ stock.

“We remain Overweight Delta Airlines (DAL) and are raising our price target from $55 to $72. DAL remains our top Legacy airline pick. We believe DAL’s strong franchise/customer loyalty and historical margin superiority can continue on the other side of the pandemic. On the other hand, DAL cannot wave away Legacy challenges, including delayed corporate/international travel and increased pressure on the balance sheet,”

“Nevertheless, we believe DAL is well positioned for the recovery as we see it – our estimates are 39% above consensus for FY22 and 49% for FY23. Our DCF-backed PT of $72 is about 20% above where the stock was trading in 2018-19 with a 2023 estimated EPS about 20% higher than 2019 as well.”

Several other analysts have also updated their stock outlook. Evercore ISI raised their price objective to $55 from $51 and gave the stock an overweight rating. Jefferies Financial Group raised their price objective to $50 from $40 and gave the stock a hold rating. Susquehanna Bancshares cut shares of Delta Air Lines from a positive rating to a neutral rating and raised their price objective to $45 from $42.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: JPMorgan, Goldman, PepsiCo, BofA, Citigroup and Delta Airlines in Focus

Earnings Calendar For The Week Of April 12

Monday (April 12)

Ticker Company EPS Forecast
HDS HD Supply Holdings $0.39

Tuesday (April 13)

Ticker Company EPS Forecast
FAST Fastenal $0.37
HCSG Healthcare Services $0.28

Wednesday (April 14)

IN THE SPOTLIGHT: JPMORGAN CHASE, GOLDMAN SACHS

JPMORGAN CHASE: The leading global financial services firm with assets over $2 trillion is expected to report its first-quarter earnings of $2.06 per share, which represents year-over-year growth of over 290% from $0.78 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 6%.

The New York City-based investment bank would post revenue growth of about 6% to around $29.8 billion.

“We expect JPMorgan to likely beat the consensus estimates for revenues and earnings. The bank has outperformed the consensus estimates in each of the last three quarters, primarily driven by a jump in the Corporate & Investment Banking segment led by higher sales & trading and investment banking revenues. However, the above growth was partially offset by some weakness in the Consumer & Community Banking segment due to the lower interest rates environment. We expect the sales & trading and investment banking revenues to drive the first-quarter FY2021 results as well,” noted analysts at TREFIS.

“Further, recovery in bond yields over the recent months is likely to benefit core-banking revenues. Additionally, JPM released $2.9 billion from its loan-loss-reserve in the fourth quarter, suggesting some improvement in the perceived loan default risk. We expect the same momentum to continue in the first quarter. Our forecast indicates that JPMorgan’s valuation is around $143 per share, which is 7% lower than the current market price of around $154.”

GOLDMAN SACHS: The leading global investment bank is expected to report its first-quarter earnings of $10.10 per share, which represents year-over-year growth of about 225% from $3.11 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of nearly 50%.

The New York City-based bank would post revenue growth of over 31% to around $11.5 billion.

“We expect Goldman Sachs to outperform the consensus estimates for revenues and earnings. The bank has reported better than expected results in each of the last three quarters, mainly due to its strength in sales & trading and the investment banking space,” noted equity analysts at TREFIS.

“Despite the economic slowdown and the COVID-19 crisis, the company reported strong revenue growth in 2020 driven by a 43% y-o-y jump in global markets division (sales & trading) and a 24% rise in the investment banking unit. We expect the same trend to drive the first-quarter FY2021 results as well. Our forecast indicates that Goldman Sachs’ valuation is around $366 per share, which is 12% more than the current market price of around $327.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 14

Ticker Company EPS Forecast
TSCO Tesco £8.15
INFY Infosys $0.16
JPM JPMorgan Chase $3.06
GS Goldman Sachs $10.12
BBBY Bed Bath & Beyond Inc. $0.31
FRC First Republic Bank $1.54
SJR Shaw Communications USA $0.26
WFC Wells Fargo $0.69
ACI AltaGas Canada $0.51

 Thursday (April 15)

IN THE SPOTLIGHT: PEPSICO, BANK OF AMERICA, CITIGROUP, BLACKROCK, DELTA AIR LINES

PEPSICO: The company which holds approximately a 32% share of the U.S. soft drink industry is expected to report its first-quarter earnings of $1.12 per share, which represents year-over-year growth of about 4% from $1.07 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of nearly 6%.

The U.S. multinational food, snack, and beverage corporation would post revenue growth of over 5% to about $14.6 billion.

“Based on the 2020 performance and evolving business conditions, the company provided guidance for 2021. It expects organic revenue growth in the mid-single digits, with core constant currency EPS growth in high-single digits. It expects a core effective tax rate of 21%. Additionally, the company expects currency tailwinds to aid its revenues and core EPS by 1 percentage point in 2021, based on the current rates,” noted analysts at ZACKS Research.

“Further, it remains committed to rewarding its shareholders through dividends and share buybacks. It anticipates total cash returns to shareholders of $5.9 million, including $5.8 million of cash dividends and $100 million of share repurchases. The company recently completed its share-repurchase authorization and expects no more share repurchases through the rest of 2021.”

BANK OF AMERICA: The Charlotte, North Carolina-based investment bank is expected to report its first-quarter earnings of $0.66 per share, which represents year-over-year growth of over 60% from $0.40 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%.

However, the United States’ second-largest bank would see a revenue decline of more than 4% to around $21.7 billion.

CITIGROUP: The New York City-based investment bank is expected to report its first-quarter earnings of $2.52 per share, which represents year-over-year growth of 140% from $1.05 per share seen in the same quarter a year ago. But Citigroup’s revenue would decline about 12% to around $18.3 billion.

BLACKROCK: The world’s largest asset manager with $8.67 trillion in assets under management is expected to report its first-quarter earnings of $7.87 per share, which represents year-over-year growth of over 19% from $6.60 per share seen in the same quarter a year ago. The New York City-based bank would post revenue growth of about 16% to around $4.3 billion.

DELTA AIR LINES: The Airline company which provides scheduled air transportation for passengers and cargo throughout the United States and across the world is expected to report a loss for the fifth consecutive time of $2.84 in the first quarter of 2021 as the airlines continue to be negatively impacted by the ongoing COVID-19 pandemic and travel restrictions. That would represent a year-over-year decline of over 450% from -$0.51 per share seen in the same quarter a year ago.

The Atlanta-based airline’s revenue would decline more than 50% to around $3.9 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 15

Ticker Company EPS Forecast
CBSH Commerce Bancshares $0.94
PEP PepsiCo $1.12
WIT Wipro $0.07
BAC Bank Of America $0.66
C Citigroup $2.52
UNH UnitedHealth $4.38
HOMB Home Bancshares $0.43
USB US Bancorp $0.95
SCHW Charles Schwab $0.79
TFC Truist Financial Corp $0.93
BLK BlackRock $7.87
JBHT J B Hunt Transport Services $1.22
AA Alcoa $0.41
PPG PPG Industries $1.57
WAL Western Alliance Bancorporation $1.47
TSM Taiwan Semiconductor Mfg $0.93
DAL Delta Air Lines -$2.84
WAFD Washington Federal $0.48

Friday (April 16)

Ticker Company EPS Forecast
CFG Citizens Financial $0.96
BK Bank Of New York Mellon $0.87
PNC PNC $2.70
ALLY Ally Financial $1.13
STT State Street $1.35
MS Morgan Stanley $1.72
KSU Kansas City Southern $1.97

 

Frontier CEO Says Now Making Money with Low Fares in Pandemic as Stock Debuts

By Tracy Rucinski

The airline started generating positive cash flow at the beginning of March, a key milestone for an industry that has been burning money after drastically scaling back flights last year as demand tanked.

Frontier is now benefiting from a recovery driven by domestic leisure travel, its specialty, flying more capacity this March than in the same month of 2019.

“Coming out of this, we’re in the best position we believe of anyone in the space given our concentration in the domestic leisure business and our ability to make money with low fares,” Biffle said in a virtual interview from New York.

The airline, owned by private equity firm Indigo Partners, whose managing partner is no-frills tycoon Bill Franke, is seeking to raise around $600 million from its initial public offering, its second attempt to go public.

Frontier on Wednesday priced its initial public offering of 30 million shares at $19 per share, the low end of its marketed range of $19-$21, likely underscoring the risks involved as the airline industry pulls out of its worst crisis.

Airline investments have been notoriously volatile in the past. The head of planemaker Boeing Co said on Wednesday the pace of vaccinations hold the key to the industry’s recovery to prior levels.

Environmental groups have called into question the industry’s plans for reducing emissions and say cheap fares such as those practiced by ultra-low-cost carriers over-stimulate the demand for air travel and contribute to global warming.

Frontier, now valued at about $4 billion, is offering 15 million shares, and will receive net proceeds of about $266 million, the carrier said.

It will use the proceeds, half going onto its balance sheet and half to Indigo and other selling shareholders, to fund growth and manage debt, including repaying some of the $150 million in government loans from a COVID-19 relief package.

That will help restore its balance sheet to near pre-pandemic levels and allow it to continue growing by 10% to 15% a year, Chief Financial Officer Jimmy Dempsey said.

The listing follows a stellar debut by Apollo Global Management-backed Sun Country Airlines last month.

Like other U.S. budget carriers, Frontier took on less debt and had a lower cash burn than large legacy airlines, creating a better financial position for a recovery that Biffle said is coming fast.

Frontier, with $1.25 billion of revenue in 2020, is targeting growth from all of its key U.S. cities beyond its home base Denver, where it has roughly 100 non-stop flights, including popular Florida destinations such as Orlando and Miami. It plans to open Tampa and Atlanta routes later this year.

The airline averted employee furloughs during the pandemic and was among the first to announce pilot and flight attendant hires. It expects to hire roughly 700 employees this year as it receives six new aircraft.

It hires roughly 100 employees per airplane, including mechanics and ground staff, the executives said.

Frontier has 156 aircraft on order with Airbus SE and the new jets will feature lighter-weight seats debuted last week to cut its fuel burn.

The airline generates 43% fuel savings compared with other U.S. airlines, making it the most fuel-efficient U.S. carrier, according to a Frontier statement last week.

“We live in Colorado,” Biffle said, adding: “ESG is real.”

(Reporting by Tracy Rucinski, Editing by Sherry Jacob-Phillips)

Why Shares Of Delta Air Lines Are Up By 5% Today?

Delta Air Lines Video 15.03.21.

Delta Air Lines Stock Moves Higher Amid Signs Of Recovery

Shares of Delta Air Lines have reached multi-month highs today after various  airlines told analysts that bookings were rising as travellers became more confident thanks to vaccination efforts. Other airline stocks like JetBlue Airways or Southwest Airlines are also moving higher today.

Delta Air Lines stated that its first-quarter revenue would decline by about 60% compared to the first quarter of 2019, an improvement from the previous forecast which called for a decline of 60% – 65%. The company’s CEO added that cash burn could soon end which will free up cash for asset purchases in the second quarter.

Other airlines also expect to report better results, so the whole segment enjoys traders’ interest in today’s trading session.

What’s Next For Delta Air Lines?

Delta Air Lines stock is currently trying to settle above the $52 level which means that the company’s shares are already close to pre-pandemic levels. The stock managed to rebound from the low at $17.51 which was reached in May 14, 2020 as traders bet that mass vaccination will ultimately boost travelling.

Right now, things are moving in the right direction for Delta Air Lines, and the market continues to push the stock higher, expecting that major improvements are around the corner.

Analysts expect that Delta Air Lines will finish the current year with a loss of $2.76 per share but estimates vary widely. The company is projected to report a profit of $3.83 per share in 2022 as the world gets back to normal thanks to vaccination programs.

At current levels, the stock is trading at less than 14 forward P/E which is cheap by today’s market standards. At the same time, airlines do not enjoy high multiples like tech stocks, and it remains to be seen whether the market will be ready to pay higher prices for shares of Delta Air Lines if analyst estimates do not move higher.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Subdued as Focus Turns to Fed

By Shashank Nayar and Medha Singh

Delta Air Lines, Southwest Airlines and JetBlue Airways said leisure bookings are rising and offered some of the first concrete signs that the worst may be over for the airline industry.

The S&P 1500 airlines index jumped about 3.8% to a one-year high, while planemaker Boeing Co added about 2%.

Other travel-related stocks including Carnival Corp, Wynn Resorts and MGM Resorts gained between 3% and 5%.

Wall Street’s main indexes on Friday logged their best week in six as approval of a $1.9 trillion relief package and mass vaccinations fueled demand for economy-linked stocks such as banks, energy, materials at the cost of high-growth tech names.

The major U.S. stock indexes were roiled in recent weeks as a spike in longer-dated U.S. bond yields due to fears of an increase in inflation and, in response, a tapering of the Fed’s easy monetary policy worried investors.

“The U.S. economy looks in a better shape than most other developed economies,” said Hussein Sayed, chief market strategist at FXTM.

“Despite the rosier economic outlook, this week’s Fed meeting is expected to be absent of major policy changes.”

At the end of Fed’s two-day meeting on Wednesday, policymakers are expected to forecast that the U.S. economy will grow in 2021 at the fastest rate in decades while reiterating their dovish stance for the foreseeable future.

The yields on benchmark 10-year Treasuries hovered near their 13-month high at 1.61%, slightly lower than its peak of 1.64% hit on Friday.

At 9:47 a.m. ET, the Dow Jones Industrial Average rose 87.51 points, or 0.27%, to 32,866.15, the S&P 500 gained 0.29 points, or 0.01%, to 3,943.63 and the Nasdaq Composite lost 6.81 points, or 0.05%, to 13,313.11.

Five of the major S&P sectors were lower, with financials and energy leading losses.

Tesla Inc added “Technoking of Tesla” to billionaire Chief Executive Elon Musk’s list of official titles in a formal regulatory filing that also named finance chief Zachary Kirkhorn “Master of Coin”. Tesla’s shares were nearly flat.

Eli Lilly and Co shares slumped about 8.5% after “mixed” results from the drugmaker’s mid-stage trial testing its experimental drug to treat Alzheimer’s cast a doubt on the chances for the drug’s accelerated approval, according to analysts.

Advancing issues outnumbered decliners by a 1.2-to-1 ratio on the NYSE and a 1-to-1 ratio on the Nasdaq.

The S&P 500 posted 59 new 52-week highs and no new low, while the Nasdaq recorded 239 new highs and six new lows.

(Reporting by Shashank Nayar and Medha Singh in Bengaluru; Editing by Maju Samuel)

Morgan Stanley Sees Over 37% Rally in Delta Airlines; Forecasts Stock at $86 in Bull Case

Morgan Stanley raised their stock price forecast on Delta Airlines, one of the major players in the United States aviation industry, to $55 from $51 and said a decent Q1 guide and bullish commentary on the call about the potential for a traffic rebound, particularly in corporate, reinforces their bullish view on the airline space.

On Thursday, Delta Airlines reported a loss for the fourth consecutive time in the December quarter and a full-year 2020 loss for the first time in 11 years as COVID-19 travel restrictions significantly dented air travel demand but CEO Ed Bastian said he expects 2021 to be the year of recovery.

The Airline company which provides scheduled air transportation for passengers and cargo reported a quarterly adjusted loss of $2.53​​ per share, worse than the Wall Street consensus estimate of $2.47​​ per share loss.

“Despite coming into the new year on the back of tough 4Q traffic numbers amidst a third pandemic wave and the prospect of 1Q somewhat bereft of catalysts, we are very encouraged by mgmt’s confident tone on the conference call with a clear line of sight to the other side of the pandemic. We think this should result in a tide that will continue to rise and lift the airline stocks with it,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“We believe Delta Airlines’ (DAL) strong customer loyalty/franchise, corporate relationships, footprint, historical PRASM/margin strength, balance sheet and mgmt. team leave them well-positioned amongst legacy peers to participate in the rebound, with the potential for an upside surprise if international/corporate volumes/PRASM can surprise to the upside in 2H21/1H22. Long-only investors returning to the sector as traffic comes back are also likely to flock to DAL, in our view, which makes the technical setup attractive as well. Our 2021/2022/2023 EPS moves to -$1.42/4.33/7.52 vs. $0.91/4.80/NA prior,”

Other equity analysts also recently updated their stock outlook. Credit Suisse raised the target price to $48 from $47. Stifel upped the stock price forecast to $49 from $39. JP Morgan lowered the price objective to $49 from $51.

In addition, Deutsche Bank lowered shares of Delta Air Lines from a “buy” rating to a “hold” rating and set a $47 target price in December. BNP Paribas began coverage and issued an “outperform” rating and a $54 price target.

Fourteen analysts who offered stock ratings for Delta Airlines in the last three months forecast the average price in 12 months at $48.83 with a high forecast of $58.00 and a low forecast of $40.00.

The average price target represents a 22.14% increase from the last price of $39.98. From those 14 equity analysts, six rated “Buy”, seven rated “Hold” and one rated “Sell”, according to Tipranks.

Delta Airlines’ shares closed 3.59% lower at $39.98 on Friday; the stock fell over 30% in 2020. Morgan Stanley’s stock price forecast suggests a potential upside of 37.57% from the stock’s current price.

Morgan Stanley also gave a target price of $86 under a bull-case scenario and $29 under the worst-case scenario. The firm currently has an “Overweight” rating on the Airline company’s stock.

“Why Overweight? Delta Airlines (DAL) has some of the strongest customer satisfaction numbers among the other Legacy peers, while also commanding a higher PRASM, making it our preferred Legacy carrier. With ample liquidity we see limited liquidity risk here,” Morgan Stanley’s Shanker added.

“Additionally, we continue to see DAL’s international alliances and partnerships as strategic assets, despite recent writedowns.”

Check out FX Empire’s earnings calendar

Delta Airlines Posts Full-Year Loss for First Time Since 2009 But CEO Bastian Eyes Recovery in 2021

Delta Airlines, one of the major players in the United States aviation industry, reported a loss for the fourth consecutive time in the December quarter and a full-year 2020 loss for the first time in 11 years as COVID-19 travel restrictions significantly dented air travel demand but CEO Ed Bastian said he expects 2021 to be the year of recovery.

The Airline company which provides scheduled air transportation for passengers and cargo reported a quarterly adjusted loss of $2.53​​ per share, worse than the Wall Street consensus estimate of $2.47​​ per share loss.

“The current operating environment will remain incredibly challenging as demand fluctuates with COVID-19 headlines & vaccine rollout. The work Delta has done on costs should provide leverage once demand improves. Delta is bullish on a second-half recovery, and there are certainly encouraging signs, but we are cautious near-term as vaccine distribution has been disappointing,” noted Helane Becker, equity analyst at Cowen and Company.

“We are reiterating our Market Perform rating on the common shares of Delta Air Lines. We are maintaining our $44 price target, which is based on 10x 2022E EPS. The air travel industry continues to be depressed by the ongoing coronavirus pandemic and related restrictions.”

The Atlanta-based airline said its revenue slumped 65.3% to $3.97 billion from a year ago​, worse than the market expectations of $3.59 billion. The company reported December quarter 2020 GAAP pre-tax loss of $1.1 billion and loss per share of $1.19 on total revenue of $4.0 billion.

For full-year 2020, the company reported GAAP pre-tax loss of $15.6 billion and loss per share of $19.49 on total revenue of $17.1 billion. Full-year 2020 adjusted pre-tax loss of $9.0 billion and adjusted loss per share of $10.76 on adjusted operating revenue of $15.9 billion.

“While our challenges continue in 2021, I am optimistic this will be a year of recovery and a turning point that results in an even stronger Delta returning to revenue growth, profitability and free cash generation,” said Ed Bastian, Delta’s chief executive officer.

Following this optimism, Delta Airlines shares closed 2.5% higher at $41.47 on Thursday. However, the stock fell more than 30% in 2020.

“Despite the pandemic, we continue to see clear reasons to expect a resounding recovery post-vaccine in both leisure and business travel. We are maintaining our $43 per share fair value estimate for Delta,” said Burkett Huey, equity analyst at Morningstar.

Delta Airlines Stock Price Forecast

Eleven analysts who offered stock ratings for Delta Airlines in the last three months forecast the average price in 12 months at $46.33 with a high forecast of $54.00 and a low forecast of $40.00.

The average price target represents an 11.72% increase from the last price of $41.47. From those 11 analysts, three rated “Buy”, seven rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $55 with a high of $86 under a bull scenario and $29 under the worst-case scenario. The firm currently has an “Overweight” rating on the airlines’ stock.

Several other analysts have also recently commented on the stock. JP Morgan lowered the target price to $49 from $51. Cowen and company cut to market perform from outperform; raises target price to $44 from $36. BofA Global Research raised the price objective to $42 from $38.

In addition, Credit Suisse upped the target price to $47 from $38. UBS raised the target price to $47 from $32. Citigroup upped price objective to $48 from $38. Jefferies initiates with a hold rating and a price target of $40.

Analyst Comments

“4Q results were an expected tough end to a historically bad year for the industry, but a decent 1Q guide and bullish commentary on the call about the potential for a traffic rebound, particularly in corporate, reinforce our bullish view on the Airline space and our OW on Delta Airlines (DAL) as our top Legacy pick,” said Ravi Shanker, equity analyst at Morgan Stanley.

“DAL has some of the strongest customer satisfaction numbers among the other Legacy peers, while also commanding a higher PRASM, making it our preferred Legacy carrier. With ample liquidity, we see limited liquidity risk here. Additionally, we continue to see Delta Airlines’ (DAL) international alliances and partnerships as strategic assets, despite recent writedowns.”

Upside and Downside Risks

Risks to Upside: 1) COVID-19 Vaccine timing. 2) Business Travel Recovery. 3) Industry Rationalization & Fare Stability – highlighted by Morgan Stanley.

Risks to Downside: 1) COVID-19 Second Wave. 2) Slower International Travel Rebound. 3) DAL has a significant underfunded pension liability at 78% funded status.

Check out FX Empire’s earnings calendar