Investors will gain insights into the state of the travel industry as Delta Air Lines (DAL) prepares to announce its Q2 results on Thursday, July 11. This announcement coincides with the peak of the summer travel season, with reports from other major carriers like American Airlines (AAL) and United Airlines (UAL) expected later in the month.
Delta Airlines Q2 Performance Projections
Delta’s Q2 sales are forecasted to rise 4% to $16.28 billion, despite an anticipated 11% dip in earnings to $2.38 per share. Notably, Delta has consistently surpassed both revenue and profit expectations for the past four quarters, with an average earnings surprise of 12.72%.
Recent Stock Performance of DAL
While Delta’s stock has shown an 8% increase over the last three years, it lags far behind the S&P 500’s 28% gain. However, Delta has outperformed its industry peers, with United Airlines’ stock declining by 8% and American Airlines plummeting by 47% during the same period. In the current year, Delta’s stock has surged 15%, closely shadowing the benchmark.
Moreover, Delta’s shares have shown a 15% increase this year, nearly keeping pace with the benchmark while surpassing United’s 13% gain and American’s 20% drop in stock value.
Diving into valuation metrics, Delta’s stock appears attractively priced at 6.9X forward earnings, higher than United’s 4.7X and American’s 5.3X but considerably below the S&P 500’s 23.5X. Notably, DAL trades at a 77% discount from its decade-high forward earnings of 30.6X and offers a modest discount compared to the median of 8.8X.
DAL’s Growth Trajectory and Future Prospects
Looking ahead, Delta’s total sales are anticipated to increase by 5% in fiscal 2024, with a further 2% rise in FY25 to reach $62.21 billion. Earnings are also expected to climb by 5% this year and soar by 14% in FY25 to $7.49 per share.
Final Thoughts on Delta Air Lines Stock
Prior to the Q2 results announcement, Delta’s stock carries a Zacks Rank #3 (Hold). The potential for growth in both revenue and earnings remains promising for Delta, and further stock upside will hinge on meeting or surpassing Q2 expectations, along with providing positive guidance that reaffirms the company’s optimistic outlook.
Zacks Names “Single Best Pick to Double”
From a multitude of stocks, 5 Zacks experts have each selected a top contender projected to soar by over 100% in the near future. Among these picks, Director of Research Sheraz Mian singles out a lesser-known chemical company that has already seen a 65% surge in the past year.
This particular enterprise boasts soaring 2022 earnings estimates, an influx of demand, and plans for share repurchasing worth $1.5 billion—making it an enticing entry for retail investors.
This prospective gem could potentially outshine or match the success of other Zacks’ Stocks Set to Double, much like the Boston Beer Company that skyrocketed by +143.0% in just over 9 months or NVIDIA, which posted a remarkable +175.9% boom in a single year.