Delta Airlines (DAL:NYE) has taken investors by surprise with its impressive third-quarter results. The airline’s Q3 adjusted earnings of $2.03 per share, up by 35% year-over-year, have exceeded the Street’s estimates of $1.95 per share. Furthermore, the company reported adjusted operating revenues of $14.6 billion, representing a significant 13% year-over-year increase and surpassing analysts’ predictions of $14.55 billion. This article will highlight the impact of robust earnings on the Delta stock forecast.
Reducing Debt:
Delta Airlines revealed that it has successfully repaid $3.7 billion in debt year-to-date, with plans to pay off more than $4 billion by the end of the year. As a result of its sound financial management, S&P upgraded DAL in August, granting it a BB+ rating “with a positive outlook.”
Optimistic Delta Stock Forecast:
Glen Hauenstein, Delta’s president, expressed confidence in the ongoing strength of travel demand. He expects a strong performance in the December quarter. The company projects revenue growth of 9% to 12% year-over-year. They also anticipate a slight estimated decline in total revenue per available seat mile (TRASM), which is expected to range from 2.5% to 4.5%.
Hauenstein stated that domestic and transatlantic trends are consistent with the September quarter on a year-over-year basis. Additionally, they anticipate a modest deceleration in unit revenue trends in the Pacific and Latin America. This deceleration is due to capacity growth linked to China’s reopening and its investments in the LATAM joint venture.
Earnings and Revenue Projections:
Delta anticipates earnings per share in the range of $1.05 to $1.30 for Q4. In FY23, it is projected to be between $6.00 and $6.25, with revenues expected to rise by approximately 20% year-over-year.
Delta Stock Forecast:
Based on the insights from 15 analysts, the average analyst target price is $55.67. These projections come in line with the company’s strong performance and optimistic outlook, earning a rating of “Strong Buy.” Stock Target Advisor’s analysts have a “neutral” stance. This analysis is backed by seven positive and six negative signals.
Current Performance:
At the last closing, the stock price was $35.98. This price has changed by -0.22% over the past week, -11.90% over the past month, and +24.76% over the last year.
Closing Remarks:
DAL stock has demonstrated remarkable strength in its Q3 performance, surpassing earnings and revenue expectations. With debt reduction and a positive outlook from S&P, the company appears poised for continued success. Delta’s forward-looking projections and strong analyst recommendations further underscore its position as a resilient and promising investment in the airline industry.
