This Airline Stock is Expecting a Strong 2023

The last few years have been difficult for the airline industry as it was among the biggest losers when the pandemic first hit in early 2020. However, with lesser restrictions on travel, the airline industry has bounced back strongly and is close to surpassing the pre-pandemic performance levels.

Delta Air Lines, Inc.’s (DAL) earnings and revenue exceeded analyst estimates in the fourth quarter.

Its EPS came 11.9% above the consensus estimate, while its revenue beat the estimate by 6.6%. The company’s operating margin came in at 10.9%, while its adjusted operating margin came in at 11.6%.

DAL’s CEO Ed Bastian said, “Delta people rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance, and I’m looking forward to recognizing their achievements with over $500 million in profit-sharing payments next month.”

Glen Hauenstein, DAL’s President, said, “For the year, we delivered $45.60 billion in adjusted revenue, a $19 billion increase over the prior year, with record unit revenue performance expected to sustain a revenue premium to the industry of more than 110%. Momentum continues in 2023 with strong demand trends, and we expect March quarter adjusted revenue to be 14 to 17% higher than 2019 on capacity that is 1 percent lower.”

The company’s revenue passenger miles for the fourth quarter increased 24.9% year-over-year to 50.47 billion. Its passenger revenue per available seat mile increased 30.8% year-over-year to 18.30 cents.

Also, its total revenue per available seat mile (TRASM) increased 23.4% from the prior-year period to 22.58 cents. In addition, its total passenger revenue increased 50.4% year-over-year to $10.89 billion.

For the fiscal first quarter ending March 31, 2023, DAL expects its total revenue to increase 14% to 17% over the same quarter of 2019 and its operating margin to come in between 4% and 6%. Its EPS is expected to come between $0.15 and $0.40. For fiscal 2023, DAL expects its total revenue to increase 15% to 20% and operating margin to rise 10% to 12% over the previous year. Its EPS is expected to come between $5 to $6.

DAL’s CEO Ed Bastian said, “As we move into 2023, the industry backdrop for air travel remains favorable, and Delta is well positioned to deliver significant earnings and free cash flow growth.” Continue reading "This Airline Stock is Expecting a Strong 2023"

Oversold Airline Ready For A Quick Rebound

By: Michael Kahn of Street Authority

Trading countertrend moves can be profitable but risky, so it pays to line up as many factors as possible in our favor before putting money to work.

When a stock sports a price-to-earnings (P/E) ratio that even a technical analyst such as me thinks is low, it's worth a look. When it is oversold at support, I'll get interested. And when the price of its main input commodity starts to fall, I'll consider a quick snapback trade.

This is the case with American Airlines (Nasdaq:AAL).

I will admit that as a chartist, looking at fundamentals gives me the willies, but AAL has a trailing P/E ratio of just 3.1. That's not only insanely low compared to the SP 500, which has a P/E ratio of 19.1, but it's less than half of the industry average of 6.3. Even based on next year's earnings, AAL trades at just 5.7 times estimates.

The stock has fallen more than 20% in the past month and a half, but the recent drop in oil prices following a multimonth rally could result in a short-term pop in AAL.

Oil prices cratered 2.5% Tuesday on expectations that U.S. crude inventories hit a new record high. This was the third straight session of losses, and oil prices are now more than 5% off their 2016 highs made last week. But AAL's action on Tuesday leads me to believe this could be a great spot to enter a quick bullish trade. Continue reading "Oversold Airline Ready For A Quick Rebound"

This stock may be getting ready to fly.

This stock may be getting ready to fly.

I was looking through our alerts recently and this stock just jumped out at me. I want to share my thoughts about what I expect will happen to this market in this short video. We've discussed this pattern before on several other videos and all have worked out very successfully.

There's never a guarantee in trading and you should not look upon this as a slam dunk. However, all the odds favor this that this stock maybe on the runway and ready to take off in a positive direction.

Take a quick look at this short video and see what you think. I think you'll be impressed at the pattern and the possibilities that this market has on the upside.

The video is available right now and there is no charge or registration.


Adam Hewison