|Bid||0.0000 x 1300|
|Ask||0.0000 x 800|
|Day's Range||29.16 - 29.56|
|52 Week Range||28.31 - 34.75|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.97|
|Expense Ratio (net)||0.60%|
Analysts covering Delta Air Lines (DAL) stock expect the company’s fourth-quarter 2018 results to continue benefiting from a robust travel demand environment. Three consecutive quarters of better-than-expected results supported analysts’ confidence in Delta stock.
Delta Air Lines stock (DAL) plunged 4.9% on December 13 after the company’s 2019 earnings and revenues outlook fell short of analysts’ expectations. The company provided updates on its 2019 outlook during a meeting with investors. For 2019, the US air carrier expects EPS between $6 and $7 (midpoint $6.50). Although at the midpoint, the earnings forecast signifies strong ~20% growth from the 2018 expected EPS of $5.59, it fell short of the Wall Street analysts’ consensus estimate of $6.69.
The Aviation segment has been General Electric’s (GE) best-performing business unit in recent quarters. The segment’s third-quarter revenues rose 12% YoY (year-over-year) and accounted for 25% of General Electric’s total revenues—compared to 24% in the third quarter of 2017. The segment’s orders rose 35% YoY to $9.1 billion.
Disciplined capacity additions along with promotional offers and marketing strategies to drive traffic helped United Continental (UAL) improve its utilization rate or load factor. In November, the company’s load factor expanded by 120 basis points YoY (year-over-year) to 83%.
On December 10, United Continental (UAL) reported its operating performance for November. The traffic (revenue passenger miles) growth rate exceeded the capacity (available seat miles) growth rate. In November, the company’s traffic grew 7.1% YoY (year-over-year)—much higher than its capacity growth of 5.5% during the same period in 2017. United Continental’s traffic growth has exceeded the capacity growth for seven consecutive months. In the first 11 months of 2018, United Continental reported a higher traffic growth rate compared to the capacity growth in every month except January and ...
American Airlines (AAL) shares fell more than 9% on December 7 after Wolfe Research analyst Hunter Keay’s comments in a note to clients. Keay questioned the bullish arguments about the industry. Keay downgraded his rating on American Airlines stock. Keay has a “peer perform” rating on American Airlines—compared to the previous “outperform” recommendation.
Major US airline shares fell on December 7. American Airlines (AAL) lost 9.1% of its value in a single trading session. Other US carriers registered massive losses in their share prices. Spirit Airlines (SAVE) fell 7.6%, Alaska Air Group (ALK) fell 6.7%, United Continental (UAL) fell 5.2%, Southwest Airlines (LUV) fell 4.2%, and Delta Air Lines (DAL) fell 3.5%. The fall on December 7 was mainly due to the broader market sell-off and Wolfe Research’s negative comments about the airline industry.
Boeing (BA) stock fell ~3.1% on December 6, making it the day’s worst-performing stock among the Dow Jones Industrial Average’s 30 stocks. The stock opened 3.7% down and fell as much as 7.4% during yesterday’s trading session due to two main reasons: the broader market sell-off on possible trade tension escalation between the US and China and news of Lion Air considering canceling orders for Boeing’s 737 Max jets. The initial blow to Boeing’s stock came due to the broader market sell-off triggered by the arrest of Huawei Technologies’ CFO, which raised fears of a potentially worsening trade relationship between the US and China.
Delta Air Lines (DAL) reported its November operating performance on December 4. In November, the airline’s traffic (revenue passenger miles) grew 4.2% YoY (year-over-year)—higher than its capacity growth of 3.8% during the same period. Delta has reported traffic growth in every month of 2018 except January. Year-to-date through November, the company’s traffic growth rate was 3.3%—almost on par with the capacity growth rate of 3.4%.
Wall Street analysts expect Delta Air Lines’ (DAL) fourth-quarter top and bottom line to continue benefiting from strong travel demand. Better-than-expected results for three consecutive quarters supported analysts’ confidence in Delta stock.
Delta Air Lines (DAL) shares fell 5.3% on December 4 after the company updated its fourth-quarter outlook. Although the airline’s bottom-line guidance was impressive, investors seemed to be disappointed with the downbeat revenue outlook for the quarter. Delta expects its fourth-quarter revenues to increase nearly 7.5% YoY (year-over-year), which is lower than the company’s earlier guidance of an 8% increase. Delta expects the unit revenue to grow 3.5% YoY in the fourth quarter, which is towards the low end of the previous guidance range of 3%–5%.
Late in November, Spirit Airlines (SAVE), a low-cost carrier operator, hinted that its fourth-quarter revenues could grow at a higher rate than previously projected. The costs could be lower than previously expected. In an SEC filing on November 26, Spirit Airlines revealed that it increased the guidance for one of its key revenue metrics, which we’ll discuss in this part. The company has reduced the growth expectations for a key cost metric. The company’s stock gained more than 15% during trading on November 27 due to the upbeat outlook.
Until the middle of October, airline stocks had been among the most battered stocks due to concerns about overcapacity and rising fuel prices—except for United Continental (UAL) and Spirit Airlines (SAVE). However, airline stocks have been gaining solid momentum since late October.
Airlines were among the most battered stocks during the broader market sell-off on December 4. All of the major indices including Dow Jones, NASDAQ, and S&P 500 fell more than 3%. Delta’s (DAL) disappointing fourth-quarter outlook also added fuel to the massive fall in airline stocks.
American Airlines’ (AAL) traffic (revenue passenger miles) growth has exceeded its capacity (available seat miles) growth in the first nine months of 2018. During the period, the company registered a 2.7% YoY increase in its traffic, while capacity growth remained at 2.2%.
American Airlines (AAL) has remained one of the most battered airline stocks in the year so far due to concerns about its high debt load and rising oil prices eroding profits. On November 12, she launched coverage on the airline industry with an attractive rating. In her note to clients, she wrote that robust travel demand along with a strong revenues growth trend and cost control measures would lead the airline industry to witness margin expansion in 2019.
Airline stocks rose Tuesday after Spirit Airlines (SAVE), a major US air carrier, hinted that its fourth-quarter 2018 revenues could grow at a much faster rate than earlier expected, while costs could come in lower than previously projected. In a Securities & Exchange Commission filing, the low-cost carrier operator revealed improved growth guidance for one of the key revenue metrics and improved expectations for a key cost metric. The company’s stock gained over 15% during yesterday’s trade on the upbeat outlook.
Analysts expect United Continental’s (UAL) fourth-quarter revenues and earnings to continue benefiting from a healthy travel demand environment. Analysts project United Continental’s fourth-quarter revenues to increase ~10% YoY (year-over-year) to $10.4 billion. The net income will likely grow 15.1% YoY to $469.5 million. The company’s EPS is expected to increase 26.4% to $1.77.
Analysts polled by Reuters have provided a consensus rating of ~2.11 for United Continental (UAL). About 56% of analysts have provided bullish recommendations on the stock. The stock has witnessed an upward shift in analysts’ recommendations after its third-quarter results and upbeat guidance for 2018.
Spirit Airlines (SAVE) announced impressive numbers for the current December quarter. Instead of TRASM (Total revenue per available seat mile) up 6%, they now see +11% in the quarter. They also see capacity up 15% for the quarter. The stock jumped 16% or more based on the positively revised guidance. And frankly, this is not one of the better airline operators. Thus, Delta (DAL), American (AAL), JetBlue (JBLU), United (UAL) and Southwest (LUV) all flew higher on the news. The global airline ETF JETS managed a 1.3% gain as well and is now up over 10% since a low in early October. Delta is now up 4.2% on the year while Spirit is up a whopping 31% besting the S&P 500 (SPY) and the Dow Jones Industrial Average (DIA), both hovering around flat-to-down. Most airlines are as cheap and Delta even boasts a 2.4% yield. Chart watchers will be seeing if Delta (and others) can break out to new highs as oil stays low and these stocks look cheap.
Analysts are bullish on the entire airline industry (JETS) and have provided “buy” recommendations on all three of Credit Suisse’s (CS) “outperform”-rated stocks United Continental (UAL), Delta Air Lines (DAL), and Alaska Air Group (ALK). Alaska Air has a consensus rating of ~2.25 from analysts polled by Thomson Reuters (TRI). About 63% of analysts have provided bullish recommendations on the stock.
On October 25, Alaska Air Group (ALK) reported mixed third quarter 2018 results. Its adjusted EPS of $1.91 beat analysts’ estimates by $0.10 but meant a year-over-year or YoY decline of 14.7%. However, revenues increased 5% YoY to $2.21 billion and surpassed Wall Street’s estimates of $2.20 billion.
On October 11, Delta Air Lines released its third-quarter results. The company’s adjusted EPS of $1.83 came in ahead of analysts’ expectations by $0.09 and registered a whopping 16.6% YoY (year-over-year) increase, driven by an 8.1% rise in revenues, lower taxes, and a reduced share count. Also, Delta Air Lines’ third-quarter revenues of $11.95 billion came in slightly higher than analysts’ estimate of $11.94 billion.
With few exceptions, airline stocks (JETS) have been among the worst performers this year due to concerns about seat capacity affecting prices and rising oil prices eroding profits. Caiado said that the companies in the space are focusing on improving their balance sheets and maximizing returns, top-line growth, and shareholder-friendly moves, which have made them capable of weathering a market recession or sharp increase in fuel prices.
Boeing (BA) has received another major order for its 737 Max 8 aircraft. The company announced yesterday that Caribbean Airlines has ordered 12 planes. Caribbean Airlines has been using Boeing’s 737-800 planes since the airline was founded 12 years ago.