Delta Airlines (NYSE:DAL), an airline stock, is set to report its fiscal fourth-quarter 2021 upcoming earnings on January 13.
Delta Airlines reported strong Q3 results, citing increased travel demand during the summer. The firm earned $0.30 per share in the third quarter, much above analyst expectations of $0.17 per share. In addition, sales surged 251.9% to $9.15 billion, far above the Street’s forecast of $8.39 billion.
Unfortunately, the stock has recently suffered a few setbacks that should be kept in mind. As a result, the company’s stock has dropped around 4% in the last six months.
Delta’s Obstacles
Delta’s stock has been dragged down by repeated flight disruptions caused by Omicron throughout Christmas and New Year’s. Since December 24, the airline has canceled hundreds of flights due to an increase in coronavirus infections caused by the Omicron, as well as severe weather in several regions of the U.S.
The airline’s Passenger revenues are anticipated to have suffered as a result of these flight cancellations in the fourth quarter of 2021.
Q4 Results May Fall Short of Expectations
According to analysts, Delta Airlines is expected to report adjusted earnings of $0.12 per share and revenues of $9.14 billion in fiscal Q4.
Although Delta Airlines outperformed profits projections by 15 cents per share in the third quarter, it’s probable that the business won’t be able to do so again in Q4.
The reasons are quite evident. The company’s expenditures are likely to rise as a result of the escalating fuel price, affecting its bottom line. Furthermore, omicron-related anxieties that have resulted in a decrease in travel may have added to the airline’s woes.
Analyst’s Positive View
Despite the challenges mentioned above, Jefferies analyst Sheila Kahyaoglu is optimistic about the airline stock’s prospects. Delta Airlines remains one of her “top airline pick for 2022,” thanks to the company’s “exposure to transatlantic travel,” “SME (small & medium enterprise) corporate travel,” and, most importantly, the “cleanest balance sheet” among its rivals.
She writes, “Following a challenging 2021 and the ongoing spread of Omicron, 2022 sets the stage for another year of recovery.”
As a result, Kahyaoglu maintained her Buy rating on the company and increased the price target to $50.00 from $45.00.
Experts Have Mixed Opinions
However, not all experts are convinced that the stock is a good investment for now.
The rest of Wall Street is wary about Delta Airlines, as seen by the Moderate Buy consensus rating, which is based on 9 Buys and 4 Holds. Delta Airlines’ stock projections show an average price target of $52.17. This implies almost 29.5% upside potential from the current levels.
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Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.
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