CFRA Keeps Strong Buy On Shares Of Delta Air Lines, Inc.

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 $48, down $1, is 6.5x our 2025 EPS view (started at $7.41; 2024’s raised to $6.51 from $6.49), below the 2018-2019 forward average of 8.5x. We think a discount is merited due to persistent delays in new aircraft deliveries that are expected to last until 2025. Q4 EPS of $1.28 vs. $1.48 beat consensus by $0.12. Shares were down 9% today due to, in our view, a more conservative outlook on its 2024 EPS forecast vs. prior guidance. Q4 revenues were up 11% Y/Y, driven by its int’l segment (+25%), while capacity grew 15% Y/Y. DAL announced its 2024 guidance, with expected earnings of $6-$7/share (vs. the prior outlook of $7/share) and fuel costs in the range of $2.70/g (vs. $2.82/g in 2023). Also, DAL expects FCF in 2024 to be in the range of $3B-$4B (vs. $2B in 2023), which we think is fair given DAL has 40% of its long-haul bookings on hand. For 2024, we think DAL should benefit vs. its legacy peers, given its peer-leading premium offerings and brand recognition. Shares currently yield 1.0%.

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