Delta Air
Delta Air
DAL
$0.79
2.02%
6%
IBD Stock Analysis
- Eliminated 39.72 entry management
- Income, income growth
Industry Group Rank
Emerging Patterns
Cup with Handle
* Not real-time data. All data shown was obtained at 2:02PM EST on 02/01/2023.
Delta Air Lines (DAL) is the IBD Stock Of The Day for Wednesday. Delta Air Lines expects strong growth in 2023 as the travel market continues to recover. DAL stock rose Wednesday above a buy point as traders digested the day’s news from the Federal Reserve.
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Despite some harsh weather and technology disruptions during the holiday season, air travel rebounded in 2022. That momentum is expected to carry over into 2023. The World Economic Forum predicts that North American airlines will fully recover at their pre-pandemic level of ridership at the end of the year.
“The industry backdrop for air travel remains favorable, and Delta is well positioned to deliver significant revenue and cash-flow growth,” Delta CEO Ed Bastian said during Q4 earnings results. of the company on January 13.
For the quarter, Delta Air Lines’ earnings rose 573% to $1.48 per share and revenue rose 42% to $13.44 billion. That easily beat Wall Street estimates for earnings per share of $1.32 on 36% revenue growth to $12.92 billion. The results marked three quarters of revenue growth and six consecutive quarters of sales growth.
For fiscal 2023, Delta forecasts “significant” earnings growth to $5 to $6 per share, up from $3.20 in 2022. It sees earnings rising 15% to 20%, to a range of $52.44 billion to $54.72 billion. FactSet analysts expected 64% earnings growth to $5.26 per share on $53.49 billion in revenue.
However, Delta also tempered expectations, projecting non-unit fuel costs and labor costs to rise in the first quarter. Delta guided Q1 earnings in a range of 15 cents to 40 cents per share, versus Wall Street forecasts of 59 cents.
However, Delta stock is up 21% year to date in 2023.
American Airlines (AAL) and United Airlines (UAL) are also big new winners. Parts of Southwest Airlines (LUV), which had a major computer malfunction that grounded thousands of flights in December, rose modestly in January. LUV stock is stuck below a key moving average.
Delta Stock
Delta Air Lines ranks second in the Transportation-Airline group, according to IBD Stock Checkup, trailing only Panama City-based Copa Holdings (CPA).
DAL stock broke out of a tight hold for its cup-with-handle base on Wednesday, rising 2% to 39.89. The current 40-week pattern has a 39.72 buy point, according to MarketSmith. The cup with a buy handle area, which extends 5% beyond the buy point, reaches 41.70.
Delta’s relative strength line has fallen off its mid-January high, and shares now have an 81 RS Rating. The airline’s growing earnings give Delta stock an 82 EPS Rating. And the stock has a 97 Composite Rating out of a best possible 99. The Composite Rating combines a number of technical indicators into an easy-to-read score.
On Wednesday, DAL stock was added to SwingTrader’s list of short-term trades. Delta stock rose 2% higher on Wednesday.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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