On Thursday, BofA Securities updated its stance on Delta Air Lines (NYSE: NYSE:DAL), increasing the stock's price target to $55 from the previous $53, while reaffirming a Buy rating. The airline's first-quarter earnings per share (EPS) for 2024 were reported at the upper end of its guidance range.
Additionally, Delta provided second-quarter EPS guidance of $2.20-$2.50, which is in line with the Visible Alpha consensus of $2.25 and above BofA's forecast of $2.12.
The analyst noted that both unit revenue and unit cost projections for Delta were approximately 100 basis points more favorable than expected, contributing to the higher EPS forecast. This positive outlook prompted the analyst to adjust the full-year 2024 EPS estimate for Delta to $6.81, up from $6.57, aligning with the higher end of the airline's projected $6-7 range.
The revised price target reflects the analyst's increased earnings expectations for Delta Air Lines. The airline's performance and forward-looking guidance indicate a stronger financial position than previously anticipated, which has led to the raised price target and sustained Buy rating.
Delta's financial update and subsequent analyst assessment underscore the company's robust revenue and cost management, which have outperformed initial models. The airline's ability to deliver at the high end of its guided range and provide optimistic future guidance has instilled confidence in the market, as reflected in the updated stock assessment by BofA Securities.
InvestingPro Insights
Following the positive assessment by BofA Securities, Delta Air Lines (NYSE: DAL) continues to show promising financial metrics. With a strong market cap of $29.55 billion and a low price-to-earnings (P/E) ratio of 6.08, Delta's valuation appears attractive. The adjusted P/E ratio for the last twelve months as of Q4 2023 stands at 6.85, which further highlights the company's earnings potential relative to its share price.
Delta's revenue growth has been solid, with a 14.76% increase over the last twelve months as of Q4 2023, signifying a healthy expansion in its operations. Additionally, the company's gross profit margin of 22.4% demonstrates its ability to maintain profitability amidst industry challenges.
InvestingPro Tips indicate that Delta has a high shareholder yield and is a prominent player in the Passenger Airlines industry. These factors, combined with the fact that analysts predict the company will be profitable this year and it has been profitable over the last twelve months, provide further evidence of Delta's strong financial health. Moreover, the airline has seen a large price uptick of 30.97% over the last six months, potentially signaling investor confidence in its future performance.
For those looking to delve deeper into Delta's financials and future prospects, InvestingPro offers additional insights and metrics. Currently, there are 6 more InvestingPro Tips available that can help investors make informed decisions. To access these tips and more, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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