Delta Air Lines (DAL) is preparing to disclose its earnings for the fourth quarter of the fiscal year 2024, and analysts are forecasting a rise in both revenue and adjusted profit. This optimism is mirrored by all 13 analysts tracked by Visible Alpha, who all placed a "buy" rating on Delta's stock with an average target price of $76.85, a potential 30% increase from its Friday closing price of $59.
For the fourth quarter, the airline’s revenue is projected to total around $14.87 billion, an estimated 4.6% increase from the same period the previous year. Despite this, net income is anticipated to fall by 45% to approximately $1.12 billion from $2.04 billion a year ago.
Delta's net income in the fourth quarter of 2023 saw a boost due to a favorable adjustment to the carrier's investment value, specifically its stake in private air travel service, Wheels Up (UP), was inflated due to their share price hike during that time frame. However, with adjustments, Delta's net income was reported as $826 million a year ago and is thought to have risen to $1.15 billion.
During an investor briefing in November, Delta expressed confidence in continuing revenue growth for its premium seating products, buoyed by an upward trend in cross-generational travel demand. Furthermore, the company anticipates an increase in revenue and earnings per share (EPS) in future years due to an expansion of its premium offerings and improved profit margins.
Simultaneously, Delta is managing an ongoing legal battle with CrowdStrike (CRWD). The tussle began last year after Delta sought damages for a Windows outage caused by a CrowdStrike update that resulted in the cancellation of thousands of flights and costs exceeding $500 million. CrowdStrike has denied responsibility for Delta's handling of the outage, attempting to dismiss the lawsuit by referencing a clause in their contract regarding liability and damages cap, as per CNBC's report last month.
Over the past year, the airline's stock has witnessed a nearly 50% surge.