How to Trade Delta Air Lines After Q4 Results
Although Delta Air Lines suffered significantly at the hands of the pandemic, the company’s earnings have improved over the last two years, with its recent fourth quarter results beating expectations.
Nevertheless, its share price remains turbulent and well-below pre-pandemic levels. Despite beating expectations in Q4, there was cause for disappointment amongst investors. Keep reading to learn more about Delta Air Lines’ Q4 results and to find out what analysts are forecasting for the stock.
|Delta Air Lines Inc.
|Symbol for Invest.MT5 Account:
|Date of Idea:
|24 January 2024
|6 - 12 months
|Position Size for Invest.MT5 Account:
- The Invest.MT5 account allows you to buy stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Delta Air Lines Q4 Performance
Earlier this month, Delta released their fourth quarter earnings report, below is a highlight of some of the key information.
- Adjusted revenue of $13.66 billion vs an expected $13.52 billion.
- Adjusted earnings per share of $1.28 vs an expected $1.17.
- Premium cabin revenue up 15%, outpacing 10% revenue growth in standard cabins.
- Revenue from partnership with American Express rose 11% to $1.7 billion, accounting for more than 12% of total revenue for the quarter.
- Forecasted adjusted earnings per share between $6 and $7 for full-year 2024.
Although revenue and earnings both beat expectations, Delta’s share price declined almost 10% on the day of its recent earnings announcement, with investors disappointed by updated guidance for the year ahead.
Last year, Delta announced that it expected to report earnings per share in excess of $7 in 2024. However, in its Q4 earnings announcement, this guidance was trimmed to $6-$7.
Thanks to soaring travel demand in 2023, Delta reported record revenue in 2023 and the airline could benefit from strong demand again in 2024, as the International Air Transport Association (IATA) predicts that a record number of people will travel in the year ahead.
Moreover, business travel, a key revenue source for airlines, is recovering, with premium cabin revenue reporting strong growth in 2023.
However, operating expenses, which rose 12% in 2023, are forecast to rise further in 2024, which would restrict operating margins. Furthermore, as with many airlines, Delta is carrying a lot of pandemic-era debt; whilst adjusted debt fell year on year, it remains high at $29 billion, compared to $11 billion at the end of 2019.
Nevertheless, these headwinds may have already been priced into the stock. At the bottom end of its earnings guidance for 2024, Delta is currently trading at a forward price to earnings ratio of around 6.3, which is considerably lower than the average for the S&P 500.
Furthermore, with the Fed expected to start cutting interest rates, the airline’s core business and its credit card partnership with American Express could benefit from an uptick in consumer discretionary spending.
So, taking all this into account, where to the analysts expect share price to go from here?
Delta Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Delta stock forecast in the past 3 months, there are currently 11 buy, 0 hold and 0 sell ratings on the stock. The highest price for a Delta stock forecast is $77.00 with the lowest price target at $43.00.
The average price target for a Delta Air Lines stock forecast is $53.00.
An Example Trading Idea for the Delta Stock Price
An example trading idea for the Delta Air Lines share price could be as follows:
- Buy the stock on a break above $43.00 to allow for volatility.
- Target just below the average analyst price target of $53.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 6 - 12 months
- If you buy 20 Delta Air Lines shares:
- If target is reached = $200.00 potential profit [($53.00 - $43.00) * 20 shares].
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises. Be sure to exercise good risk management and always know how much you could potentially lose on a trade, as well as the costs involved.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 20 shares in Delta Air Lines would result in a commission of $0.40 ($0.02 * 20 shares) for executing a per-side transaction.
However, there is a minimum transaction fee of $1. So, buying 20 Delta shares would result in a commission of just $1 overall!
How to Buy Delta Air Lines Stock in 4 Steps
With Admirals, you can buy shares in more than 4,500 companies, including Delta Air Lines, with a commission of just $0.02 per share and a minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the dashboard.
- Click ‘Invest’ on your live or demo account to open the web platform.
- Search for Delta shares and click the symbol to open a price chart
- Click ‘Create New Order’, enter the number of shares you wish to purchase and hit ‘Buy’ to send your order to the market.
Click on the banner below to trade Delta stock today! ▼▼▼
Do You See the Delta Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Delta’s share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
The Trade.MT5 and Trade.MT4 accounts allow you to speculate on the price direction of stocks and shares using CFDs.
This means you can trade long and short to potentially profit from rising and falling stock prices.
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.