Why Delta Stock Is Up By Almost 4% Today

Delta Stock Rebounds After Analyst Upgrade

Shares of Delta Air Lines are gaining ground today after Raymond James raised its rating to Strong Buy with a price target of $58.

Yesterday, Delta Air Lines released its second-quarter results, reporting revenue of $7.13 billion and GAAP earnings of $1.02 per share. On an adjusted basis, Delta Air Lines reported a loss of $1.07 per share. The company managed to beat analyst estimates on both earnings and revenue.

In its report, Delta Air Lines stated that domestic leisure travel had fully recovered to 2019 levels. In addition, Delta Air Lines indicated that there were encouraging signs of improvement in business and international travel.

Importantly, Delta Air Lines did not witness any reductions in demand due to the Delta variant of coronavirus, which is back into spotlight due to the rising number of new coronavirus cases in the U.S.

Delta Air Lines also noted that it was profitable in June and that it expected that it would be profitable in the second half of 2021.

What’s Next For Delta Stock?

Analyst estimates for Delta’s 2021 earnings have been mostly flat in recent weeks. Currently, analysts expect that Delta Air Lines will report a loss of $3.78 per share in 2021.

Meanwhile, analyst estimates for 2022 earnings have been moving higher, and analysts expect that Delta Air Lines will report earnings of $4.06 per share in 2022. At current price levels, the stock is trading at roughly 10 forward P/E, which is an attractive level in the current market environment.

The key question in the near term is whether the Delta variant of coronavirus will have a notable impact on the recovery of the airline industry. While Delta Air Lines noted that it saw no impact on bookings, the situation could be more challenging on the international front as few countries have a successful mass vaccination program.

In case traders manage to ignore coronavirus-related risks, Delta Air Lines stock will have a good chance to rebound from current levels due to attractive valuation and strong domestic demand for air travel.

For a look at all of today’s economic events, check out our economic calendar.