Delta Air Lines (NYSE:DAL) maintained its Buy rating and $59.00 price target from financial services firm TD Cowen. The endorsement comes as the airline provided an updated guidance for the third quarter and full year 2024, which was presented at a recent sell-side conference.
The updated guidance revealed that Delta's third-quarter results were better than initially anticipated, despite the impact of CRWD—assumed to be a reference to a significant event or factor affecting the company.
Furthermore, the forecast for the full-year earnings per share (EPS) is expected to remain robust, with a projection that it will retain a figure in the $6 range, inclusive of the CRWD impact.
Delta's operational reliability, which had been disrupted, was reported to have been quickly restored. This swift recovery is in line with similar updates from industry peers. Additionally, a reduction in overall industry capacity is contributing to stronger yields, and the current cost of fuel is providing some margin relief for the airline.
The analyst from TD Cowen emphasized the positive outlook for Delta by reiterating the Buy rating and maintaining the $59 price target. The commentary suggests that the factors influencing the airline's performance, such as operational efficiency and industry dynamics, are playing a favorable role in its financial health.
Investors and stakeholders in Delta Air Lines may view this maintained rating and price target as a sign of the company's resilience and potential for maintaining profitability in the face of industry challenges.
Delta Air Lines announced an expected revenue shortfall of $380 million for the current quarter due to a software update disruption from cybersecurity firm CrowdStrike (NASDAQ:CRWD), leading to approximately 7,000 flight cancellations over five days. Delta also revealed the departure of its Executive Vice President and Chief Operating Officer, Michael Spanos, with no successor announced yet. In addition, the U.S. Department of Transportation has initiated an inquiry into the loyalty programs of major airlines, including Delta, focusing on practices related to rewards devaluation, pricing transparency, and consumer choice.
Furthermore, amid rising tensions in the Middle East, Delta, along with several other international airlines, suspended flights to the region. Lastly, Delta recently provided an investor update at the Morgan Stanley (NYSE:MS) Laguna Conference, detailing the company's operations, financial outlook, and potential risks.
InvestingPro Insights
As Delta Air Lines (NYSE:DAL) garners a vote of confidence from TD Cowen with a maintained Buy rating and a $59.00 price target, real-time data from InvestingPro further illuminates the financial landscape of the airline. Delta's market capitalization stands at a robust $28.98 billion, backed by a competitive P/E ratio of 6.31, which is favorable when considering the near-term earnings growth. This aligns with an InvestingPro Tip highlighting Delta's trading at a low P/E ratio relative to its earnings growth potential.
InvestingPro Data also shows that Delta's revenue has grown by 7.84% over the last twelve months as of Q2 2024, indicating a steady increase in the company's financial throughput. Furthermore, the airline's gross profit margin remains strong at 21.84%, suggesting efficient cost management despite the industry's well-known volatility. With analysts predicting profitability for the current year, as per another InvestingPro Tip, it's clear that Delta is positioned as a prominent player in the Passenger Airlines industry.
For investors seeking more comprehensive insights, there are additional InvestingPro Tips available, which include Delta's high shareholder yield and the fact that the company has been profitable over the last twelve months. These metrics and tips can be found by visiting InvestingPro's detailed analysis page for Delta Air Lines at https://www.investing.com/pro/DAL.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.