Shares of leading passenger and cargo carrier,
Delta Air Lines Inc.
) hit a new 52-week high of $42.35 on June 4, 2014. However the
company ended yesterday's trading session a trifle lower at $42.17,
reflecting a solid 140% return over the past 12 months.
For 2014, Delta is committed to improve its operational
performance and margins, besides making balanced capital deployment
to increase shareholder returns. The company managed to reduce its
net debt to $9.1 billion at the end of first-quarter 2014, and is
planning to lower it further to $7 billion in the next two
Delta is also progressing well on improving ancillary revenues
by adding better features to its services as well as introducing
products to enhance passenger satisfaction and experience, both in
air and on ground. In an attempt to enhance its fleet structure,
amenities, products and technological base, Delta aims to invest
$2.0-$2.5 billion annually, over the next five years.
So far this year, the company's shares have soared more than
52%. Acquisitions and mergers have played a major role in shaping
Delta's success story. In June 2013, Delta completed the
acquisition of a 49% stake in British carrier Virgin Atlantic from
Singapore Airlines, following approvals from the U.S. Department of
Justice and the European Commission. Both airlines have agreed on a
code-sharing deal across 108 routes connecting 66 destinations
across North America and the U.K.
Notably, in the past one year, Delta has reported impressive
quarterly numbers. In all of the last four quarters, the company
has surpassed the Zacks Consensus Estimate, with an average
earnings beat of 6.3%, including a positive surprise of 13.8% in
the previously concluded quarter. In the past 60 days, the company
has witnessed upward earnings estimate revisions for the current
year leading to the Zacks Consensus Estimate moving up by 14.2% to
Going ahead, we expect Delta to perform impressively on various
strategic measures such as solid domestic demand, route launches,
introduction of ancillary products, strong customer service and
revamping of its fleet structure.
Delta Air Lines currently has a Zacks Rank #1 (Strong Buy). Some
other airline stocks which warrant a look are
Southwest Airlines Co.
Alaska Air Group, Inc.
American Airlines Group Inc.
). All these stocks sport a similar Zacks Rank #1.
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