Airlines are under pressure as virus mutations threaten economic recovery. After recovering more than half of the decline incurred during the pandemic, Delta Air Lines stock price faces stiff resistance at $50.
Delta Air Lines stock price recovery is continuing after the 2020 meltdown caused by the COVID-19 pandemic, but is struggling to break above the $50 mark. With less than one week to go until the Q2 2021 earnings, investors are optimistic about the company’s ability to beat forecasts.
The latest variants of the Covid virus are spreading faster, however, and question marks are being raised about how it will affect the economic recovery. The longer the pandemic persists, the greater the pressure on the airline industry.
Delta Air Lines Still Losing Money
Investor optimism during the pandemic gew with the announcement of effective vaccines last November. The airline industry started to recover gradually, and now it is time to see some results.
For the second quarter of the year, the market expectations are that Delta lost money, but not as much as previously. The consensus is for an EPS of -$1.4, 68% up on the year.
Starting with the next quarter, investors expect Delta to post positive earnings. For the third and fourth quarters, the market expects $0.25 and $0.73 EPS respectively. The deciding factor is how the pandemic evolves and if we are to see new restrictions in the upcoming months.
What Do Analysts Say About Delta Air Lines Stock Price?
Analysts remain bullish. Of twenty-eight analysts who cover Delta’s stock price, twenty-two have buy ratings and six neutral. There is not a single sell rating for Delta, and the price targets differ from one investment house to another.
For example, Morgan Stanley is bullish with a $73 target. MKM partners is bullish too, but with a target of $59. With business demand expected to improve, optimism is driving airline stocks higher.
Delta Air Lines share price is up over 55% in the last twelve months and almost flat year to date.