It has not been a great day for airline stocks, as Delta Airlines (NYSE:DAL) slipped over 2% in Friday afternoon’s trading. Investors were apparently unhappy with a big new airplane purchase Delta embarked upon, and possibly with good reason. Ed Bastian, CEO of Delta, made it clear that he was “confident” in Delta’s purchase of 100 aircraft. However, the problem is the kind of aircraft Delta agreed to buy. Delta agreed to buy 100 Max 10 aircraft from none other than Boeing (NYSE:BA) in 2022, and the craft in question will arrive in 2025.
This was the first time that Delta ordered anything from Boeing in the last 10 years, and some might argue, the worst possible time to start. Of course, Bastian immediately followed up, declaring that Delta wouldn’t take possession of the aircraft until “…we have 1,000% confidence that that plane is fully secure, fully safe and…everyone has signed off to that.”
But The Airbus Flights Are Looking Up
While Delta might end up smarting over its Boeing move, its move with Airbus (OTHEROTC:EADSY) might be better received. Boeing is installing several “business class suites,” complete with doors, on Airbus A321neo planes. Adding doors actually requires an exemption from certain federal laws, as doors aren’t allowed much on aircraft outside of a few key points. It gets in the way of emergency evacuations, after all. Early reports suggest they’ll be heavily featured on domestic premium routes, though it’s not confirmed yet if that’s how it will work.
Is Delta Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DAL stock based on 10 Buys assigned in the past three months, as indicated by the graphic below. After a 4.33% loss in its share price over the past year, the average DAL price target of $53.33 per share implies 43.86% upside potential.
