Home > Should you invest in Delta Air Lines after a third consecutive earnings beat?

Should you invest in Delta Air Lines after a third consecutive earnings beat?

Delta Air Lines released its financial results for the Q4 FY2021 yesterday. It reported better than expected EPS and revenues on the quarter. More than 8,000 employees tested positive in the past four weeks. 

Delta Air Lines’ stock price finished up +2.12% yesterday as the company reported its Q4 FY2021 financial results. EPS exceeded expectations, coming out at $0.22 vs. $0.15 expected, and revenue reached $9.47 billion, beating estimates by $181.13 million.

Despite warning on potential losses in the first quarter of 2022, the company raised its overall profitability guidance for the upcoming year. As a result, the stock price advanced, as investors bet that the omicron variant would fade fast. Speaking of the virus, 8,000 Delta employees have tested positive in the past four weeks only, affecting the company’s ability to operate to its full potential.

The COVID-19 pandemic severely impacted Delta’s stock price. The airline industry took a big hit when economies shut down in 2020, and the recovery was slow.

However, as the world’s economies reopen, Delta found its way back to profitability. This is the third consecutive quarter when the company reports better than expected EPS and revenues. On top of that, its guidance for next year hints at better results.

What do analysts say about Delta Air Lines’ stock price?

Most analysts are bullish on the stock price and believe that the airline industry recovery will continue. As such, out of the 36 analysts covering the stock price, 27 have issued buy ratings, and 9 have issued neutral ratings. No analyst has a sell recommendation on Delta Air Lines’ stock price.

Yesterday’s positive results were noticed and the stock price was upgraded to buy at Susquehanna Financial Group with a price target of $50. Raymond James Financial has an even higher price target, $55, and it maintained its buy recommendation last November.

Delta Air Lines is one of the largest airlines in the United States and the world. It employs 74,000 people, and it is based in Atlanta, Georgia. At the current stock market price, the company’s market capitalization reached $26.30 billion, and its enterprise value $48.39 billion.

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