United Airlines and Delta Air Lines stock deserves a rerating.
Delta Air Lines Inc DAL isn't just taking its customers to new destinations — it's flying high on the stock charts as well.
Over the past month, industrial stocks have taken off, with the Industrial Select Sector SPDR Fund XLI surging by 6.10%, outpacing the broader S&P 500's 3.72% gain.
The airline's latest news could have been better, but the stock remains at an excellent value on balance.
United Airlines did not mention the cost of July's CrowdStrike IT outage in its earnings report. The incident especially affected Delta, which canceled thousands of flights.
The legacy carrier is on a good run, and shareholders will be hoping strong third-quarter results can help it shake off last week's Delta disappointment.
Delta Air Lines Inc. NYSE: DAL reported its third-quarter 2024 earnings report, and shares initially gapped down in reaction to the headline numbers. Investors were disappointed by the earnings-per-share (EPS) miss by 2 cents, reporting $1.50, along with a revenue miss of nearly $700 million.
Delta said its caterer was informed of a "food safety issue" in its Detroit hub and that activity there had been suspended. Delta said no customers or employees illnesses were reported.
Although Delta Air Lines (DAL) posted mixed Q3 results on Thursday, the company's valuation and post-pandemic recovery are still enticing.
United Airlines is favored over Delta following the IT outage. The airline sector is normalizing post-Covid, with United well-positioned for higher profitability and potential capital returns to shareholders. United trades at 5x 2025 EPS targets, with a projected 14% earnings growth, and has significantly reduced its debt, enhancing financial stability.
Airline and transportation stocks have been under pressure from weakening consumer discretionary trends lately, especially as inflation is now threatening to spike again after the – arguably premature – interest rate cuts coming from the Federal Reserve (the Fed), being the most aggressive policy shift since late 2007 in face of the financial crisis of 2008.
On Thursday, Delta Air Lines announced that it expects a minor revenue hit in the fourth quarter due to the upcoming presidential election, and lower demand for travel before and after.