Why Delta Air Lines Stock Is a Perfect Summer Travel Season Pick

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It’s understandable if you’re hesitant to invest in Delta Air Lines (NYSE:DAL) right now. After all, inflation hasn’t gone away and you might wonder whether Delta Air Lines stock will be vulnerable in the coming months. However, a review of the facts should bolster your confidence in the travel industry, and in Delta specifically.

Granted, this year’s summer travel season could be make-or-break for Delta Air Lines. The travel industry will be tested, but I expect Delta to pass the test with flying colors. So, make sure your seat belt is fastened as we prepare for an exciting trip and, hopefully, superior summertime profits.

Get Ready for a ‘Record’ Travel Season

If you’re worried about a falloff in travel demand this summer, here are some reassuring words. First of all, after Delta Air Lines’ posted outstanding quarterly results (which we’ll discuss in a moment), Raymond James Managing Director Savanthi Syth concluded that consistent air-travel demand is now a “new normal.”

The standard could be set for the airline industry’s “new normal” this summer. InvestorPlace contributor Charles Munyi predicted, “With international tourism set to return to pre-pandemic levels in 2024, airlines could have another great year.” Air-travel demand, Munyi, added, “will likely strengthen from Asia-Pacific and have a further upside from a potential recovery in China.”

Lower airfares could be a summertime-travel catalyst this year. Despite inflationary pressure in the economy overall, the data suggests that airfare prices will be down this summer, potentially boosting travel demand.

In addition, Delta Air Lines’ investors can take comfort in a quote from the company’s CEO, Ed Bastian. He confidently declared, “Demand continues to be strong, and we see a record spring and summer travel season with our 11 highest sales days in our history all occurring this calendar year.”

Delta Air Lines’ ‘Constructive’ Financials

Bastian also asserted, “This may be the most constructive backdrop that I’ve seen in my airline career.” The CEO’s confidence seems to be overflowing, but it’s backed up by Delta Air Lines’ impressive financial figures.

Here are the need-to-know stats. In the quarter that ended in March of 2024, Delta Air Lines’ revenue grew 6% year over year to $12.6. This result exceeded Wall Street’s consensus forecast of $12.5 billion in revenue.

Delta reported earnings of 45 cents per share, versus 25 cents in the year-earlier quarter and the analysts’ consensus estimate of 36 cents.

That sounds pretty “constructive,” wouldn’t you agree? Delta Air Lines’ top-line and bottom-line growth indicate that the airline is thriving despite overall price inflation in the economy.

Yet, the outlook could get even better this summer. According to Reuters, the International Air Transport Association (IATA) “expects 4.7 billion people to travel in 2024, compared with 4.5 billion in 2019.”

Amid this bullish backdrop, Delta Air Lines optimistically guided for earnings of $6 to $7 per share for fiscal 2024. This implies strong earnings acceleration after Delta’s March-quarter earnings of 45 cents per share.

Travel First-Class With Delta Air Lines Stock

Are you ready for the summer? Just as importantly, is your portfolio ready for the summer? I’d say the answer is “no,” unless you have a share position in Delta Air Lines.

Delta’s CEO is ultra-confident, but all of the indicators point to robust summertime travel demand. Plus, the skeptics can’t really argue with Delta’s quarterly results. Therefore, you’d better hurry up, pack your bags and prepare for takeoff with a summertime stake in Delta Air Lines stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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The post Why Delta Air Lines Stock Is a Perfect Summer Travel Season Pick appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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