On Friday, TD Cowen sustained its optimistic stance on Delta Air Lines (NYSE:DAL), keeping a Buy rating and a steady price target of $59.00. The firm's analysis is based on Delta's recent quarterly guidance update and projections for the near future. The analyst from TD Cowen adjusted estimates to align with Delta's latest forecast for the fourth quarter of 2024 and refined predictions for fiscal years 2025 and 2026.
The forecast for the fourth quarter includes expected Available Seat Mile (ASM) growth at the midpoint of the guidance range, with fuel costs anticipated at the upper end. The Cost per Available Seat Mile excluding fuel (CASMex) is projected to increase by 3.1%. Additionally, the firm predicts a load factor of 83.6% and a slight yield increase of 0.2%. Based on these factors, revenue is modeled to rise by 3.1%.
The adjusted Earnings Before Interest and Taxes (EBIT) margin is estimated at 12.3% for Delta Air Lines, with the adjusted Earnings Per Share (EPS) maintained at $1.79. The analysis indicates that the upcoming investor day will serve as the next significant event that could influence the airline's stock performance.
Delta's performance metrics and the financial estimates provided by TD Cowen highlight the airline's expected financial health and operational efficiency in the coming quarters. The maintained Buy rating and price target suggest a stable outlook for the airline's shares in the market.
In other recent news, Delta Air Lines has been receiving positive assessments from various analysts. Seaport Global Securities maintained a Buy rating for Delta Air Lines, with a steady price target of $56.00, based on the airline's projected earnings per share for 2025 and 2026. The firm also anticipates a $5 billion, 3-year stock buyback program, consistent with Delta's previous financial strategies.
Delta's upbeat revenue trends and increased fare-setting ability have also drawn attention. The airline expects a record fourth-quarter adjusted profit between $1.60 and $1.85 per share, surpassing analyst consensus. Barclays, Susquehanna, and Bernstein SocGen Group have expressed confidence in Delta's future performance, raising their stock targets.
However, Delta has suspended its New York-Tel Aviv route until year-end due to rising tensions in the Middle East. Despite this, Delta's management and analysts from TD Cowen and Citi remain optimistic about its trans-Atlantic unit revenue trends for the fourth quarter.
Furthermore, Susquehanna maintained a Positive rating on Delta Air Lines and increased the price target to $59 from $50, signaling confidence in the airline's future performance. The firm revised its financial forecasts for Delta, adjusting the third-quarter adjusted earnings per share (EPS) estimate down to $1.50 and raising the fourth-quarter adjusted EPS estimate to $1.45.
InvestingPro Insights
Delta Air Lines' financial metrics and market performance align well with TD Cowen's optimistic outlook. According to InvestingPro data, Delta's P/E ratio stands at 7.08, indicating that the stock is trading at a relatively low earnings multiple. This metric supports the "InvestingPro Tip" that Delta is trading at a low P/E ratio relative to near-term earnings growth, potentially offering value to investors.
The company's revenue growth of 7.84% over the last twelve months and a strong operating income margin of 9.95% underscore Delta's operational efficiency, which is crucial in the competitive airline industry. These figures complement TD Cowen's forecast of a 3.1% revenue increase and a 12.3% adjusted EBIT margin for the upcoming quarter.
An "InvestingPro Tip" highlights that 8 analysts have revised their earnings upwards for the upcoming period, which aligns with TD Cowen's maintained Buy rating and positive outlook. This consensus among analysts suggests growing confidence in Delta's financial performance.
For investors seeking more comprehensive insights, InvestingPro offers additional tips and analysis, with 9 more tips available for Delta Air Lines.
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