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6 Reasons Why Delta (DAL) Should be in Your Portfolio Now
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Delta Air Lines, Inc. (DAL - Free Report) has performed well in the past year and has potential to sustain the momentum. If you have not taken advantage of its share price appreciation yet, it is time for you to add the stock to your portfolio.
Let’s take a look at the factors that make DAL an attractive pick.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have gained 24.6% in the past year compared with 6.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Delta currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Estimate Revisions: Nine estimates for 2023 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2023 earnings has moved up 21.5% in the past 60 days.
Positive Earnings Surprise History: Delta has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters (two miss), delivering an earnings surprise of 2.1%, on average.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $6.67 per share, which reflects year-over-year growth of 108.5%. Moreover, earnings are expected to register 12.8% rise in 2024. DAL’s long-term expected earnings per share (EPS) growth rate is anticipated to be 37.9%.
Driving Factors: Improved air-travel demand, particularly on the domestic front, is aiding Delta. Owing to the positive, DAL reported better-than-expected EPS and revenues in second-quarter 2023. Third-quarter EPS is expected in the range of $2.2-$2.5. Adjusted operating margin in the September quarter is projected in mid teens.
Delta’s liquidity position is encouraging. The airline ended second-quarter 2023 with cash and cash equivalents of $6,611 million, much higher than the current maturities of debt and financial lease of $2,136 million. This implies that the company has sufficient cash to meet its current debt obligations. DAL's efforts to repay its debts are promising too.
Image: Shutterstock
6 Reasons Why Delta (DAL) Should be in Your Portfolio Now
Delta Air Lines, Inc. (DAL - Free Report) has performed well in the past year and has potential to sustain the momentum. If you have not taken advantage of its share price appreciation yet, it is time for you to add the stock to your portfolio.
Let’s take a look at the factors that make DAL an attractive pick.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have gained 24.6% in the past year compared with 6.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Delta currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Estimate Revisions: Nine estimates for 2023 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2023 earnings has moved up 21.5% in the past 60 days.
Positive Earnings Surprise History: Delta has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters (two miss), delivering an earnings surprise of 2.1%, on average.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $6.67 per share, which reflects year-over-year growth of 108.5%. Moreover, earnings are expected to register 12.8% rise in 2024. DAL’s long-term expected earnings per share (EPS) growth rate is anticipated to be 37.9%.
Driving Factors: Improved air-travel demand, particularly on the domestic front, is aiding Delta. Owing to the positive, DAL reported better-than-expected EPS and revenues in second-quarter 2023. Third-quarter EPS is expected in the range of $2.2-$2.5. Adjusted operating margin in the September quarter is projected in mid teens.
Delta’s liquidity position is encouraging. The airline ended second-quarter 2023 with cash and cash equivalents of $6,611 million, much higher than the current maturities of debt and financial lease of $2,136 million. This implies that the company has sufficient cash to meet its current debt obligations. DAL's efforts to repay its debts are promising too.
Other Stocks to Consider
Some other top-ranked stocks for investors interested in the Zacks Transportation sector are GATX Corporation (GATX - Free Report) and Kirby Corporation (KEX - Free Report) .
GATX, which presently carries a Zacks Rank #2, is aided by gradual improvement in the North American railcar leasing market. You can see the complete list of today’s Zacks #1 Rank stocks here.
For third-quarter and 2023, GATX’s earnings are estimated to register 36.6% and 14.3% increases, respectively, on a year-over-year basis.
Kirby currently carries a Zacks Rank #2. Strong segmental performances are boosting Kirby’s top line.
For third-quarter and 2023, KEX’s earnings are suggested to record 58.5% and 76.2% improvements, respectively, on a year-over-year basis.