Delta Air Lines (NYSE:DAL) could kickoff strength for airline stocks when the company reports fourth-quarter financial results Tuesday before market open.
Here are the earnings estimates, what analysts are saying, and key items to watch.
Earnings Estimates: Analysts expect Delta Air Lines to report fourth-quarter revenue of $14.73 billion, down from $15.56 billion in last year's fourth quarter, according to data from Benzinga Pro.
The company has beaten analyst revenue estimates for six consecutive quarters.
Analysts expect the company to report fourth-quarter earnings per share of $1.53, down from $1.85 in last year's fourth quarter.
The company has beaten analyst estimates for earnings per share in four straight quarters.
What Analysts Are Saying: Delta Air Lines has received positive analyst coverage in recent weeks, with several analysts raising their price targets.
Bank of America analyst Andrew Didora recently highlighted Delta Air Lines as one of the top stocks in the airline sector. The analyst maintained a Buy rating on the stock and raised the price target from $74 to $80.
Didora sees Delta as having strength in the premium sector and strong cash flow generation.
Here are other recent analyst ratings on Delta Air Lines and their price targets:
- Susquehanna: Maintained Positive rating, raised price target from $70 to $85
- TD Cowen: Maintained Buy rating, raised price target from $77 to $82
- Goldman Sachs: Maintained Buy rating, raised price target from $68 to $77
Key Items to Watch: Delta's earnings report comes after recent news of record holiday travel.
TSA reported record screenings on the Sunday after Thanksgiving (Nov. 30) with 3.13 million passengers screened. TSA also reported total screenings of more than 18 million passengers from Nov. 25 through Dec. 1.
A report from AAA highlighted strong holiday travel demand in December with air travel set to see new records and TSA reporting strong numbers.
Those records and strong demand will likely translate to strong results in the fourth quarter for Delta and other airline companies.
Delta reported third-quarter revenue of $16.7 billion, up 6% year-over-year. The company reported passenger revenue up 3% year-over-year for the third quarter with premium products and loyalty travel awards helping to boost quarterly results.
The company raised its fourth-quarter and full-year outlook after the third-quarter financial results.
Analysts and investors will be watching to see if fourth-quarter results come in ahead of estimates. Future guidance will also be a key factor in determining which direction Delta shares trade after the earnings report.
Delta is the third largest holding in the US Global Jets ETF (NYSE:JETS), an ETF that could see interest depending on how the financial results end up. Delta is the third largest holding at 10.6% of assets while the top two positions represent 11.5% and 11.0%.
Delta Stock Price Action: Delta shares are down 2.6% to $70.44 on Monday versus a 52-week trading range of $34.74 to $73.16. Delta stock is up 8.2% over the last year, trailing the 13.5% return of the Jets ETF.
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