Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Delta Airlines’ Recovery Potential Just Keeps Growing

By (Sam Quirke )Stock MarketsJun 10, 2021 08:11AM ET
Delta Airlines’ Recovery Potential Just Keeps Growing
By (Sam Quirke )   |  Jun 10, 2021 08:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

With consistent higher lows being set on their stock’s chart for much of the past year, there’s a lot to like about Delta Airlines (NYSE:DAL) right now. The $30 billion airline major has been riding the reopening wave that’s raised it and its peers a long way above the dark days of 2020. The 170% shares have tacked on since the lows of last year are testament to that.

But even with the vaccine rollout and full economic reopening continuing to near completion, that doesn’t mean the edge is gone. If anything, there are plenty of signs suggesting the best is yet to come. Earlier this week, the folks over at Jeffries boosted their rating on the stock from Hold to a Buy, and called them the best positioned of the majors for the next stage of the recovery. With TSA traffic back to 70% of its 2019 levels, that’s a bullish statement to be making.

Fresh Upgrade

Analyst Sheila Kahyaoglu summed up the team’s view when she said "about half of Delta’s sales are corporate, and we think its 50% exposure to SMB travel should drive some share gain as corporate travel restarts. In addition, Delta has outsized transatlantic exposure versus its peers. We see 30% potential upside to 2023 earnings power, driven by yield improvement, lower expenses and lower fuel costs.”

They’re also forecasting 2023 EPS to hit $7.60, a current street high, and a print that would confirm a remarkable turnaround from the non-GAAP EPS of -$3.55 which Delta posted in April’s Q1 report. This would be slightly higher than their pre-pandemic expectations for 2020’s EPS and if you’re inclined to buy into Jefferies’ bullishness, then herein lies the opportunity. Delta’s stock is still trading 25% lower than its pre-COVID levels, a gap which it should easily eat into and fill over the coming months if the recovery trend maintains its trajectory.

At their presentation at the Bernstein Strategic Decisions Conference last week, CEO Ed Bastian made it clear the company expects this of themselves and gave some indications that their recovery strategy is paying dividends already. He increased guidance for Delta’s Q2 revenue and thinks their pre-tax loss for the quarter will be better than expected. By the end of this month, Bastian is also expecting domestic leisure travel to be 100% restored, with their cost per available seat mile getting back to 2019 levels by the end of the year.

Strong Trends

An impressive statistic from this year’s Memorial Weekend shows why this goal should be easily achievable. Domestic leisure tickets sales were up 30% compared to the same holiday weekend in 2019. Tickets booked through corporate channels are showing consistent improvement also and were down -58% compared to 2019 versus -67% the previous week. This is all the more impressive considering key corporate cities like New York and San Francisco weren’t even fully reopened in May. This growing recovery potential has been picked up on by CFRA too, who called Delta a key recovery name in their latest list of stocks with ongoing positive exposure to the global vaccine rollout.

The passenger traffic rebound is still gathering pace and Delta has undoubtedly made the most of it so far. Technically, shares have been consolidating in a narrowing range since February and look poised for a breakout in the coming weeks. For those of us on the sidelines and considering adding some airline exposure to our portfolio, Delta has to be considered one of the stronger picks out there.

Pick Of The Bunch

Towards the end of last month Morgan Stanley (NYSE:MS) said they came away very impressed from meetings with Delta’s executive team. They went so far as to say that Delta is the only legacy airline they’re covering that has an Overweight rating at Morgan Stanley. The company’s strong franchise base, customer loyalty and historical margin superiority are expected to continue on the other side of the pandemic.

With shares still trading at a significant discount to their pre-pandemic levels, it’s not unreasonable to think that in the not too distant future we’ll be scratching our heads about how they stayed down here for this long at all.

Delta Airlines Stock Chart
Delta Airlines Stock Chart

Original Post

Delta Airlines’ Recovery Potential Just Keeps Growing

Related Articles

Delta Airlines’ Recovery Potential Just Keeps Growing

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email