CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target of $49, up $4, is 7.6x our ’24 EPS view (unchanged at $6.49; 2023’s remains at $6.05), a discount to DAL’s historical average. We think a discount is merited due to rising unit costs. In mid-Dec., DAL reiterated its Q4 outlook, with revenues expected to grow by 11% Y/Y ($13.6B vs. $12.3B in Q4 ’22), EPS to be in the range of $1.05-$1.30, while expecting fuel costs of $3.05/gallon at the midpoint (4% discount vs. its legacy peers Q4 outlook) due to its wholly owned refinery, which we view as positive. Demand remains resilient despite the higher-than-expected slowdown experienced in Q3 ’23, with domestic demand up ~10% Y/Y and int’l travel up 27% (per the most recent Bureau of Transportation Statistics data as of Dec.), which we think should enable DAL to see healthy earnings power in Q4. For ’24, we think demand could start normalizing; however, in our view, DAL should continue exceeding its legacy peers given its proven leadership, premium offerings, and fuel cost savings from its refinery.