Delta Air Lines (DAL) Better Outlook For 2024 Can Help Push Price Post Earnings

Morgan Stanley analyst have been upbeat about Delta's outsized exposure to corporate travel vs its peers. Consensus recommendation of the 21 analysts following the stock tracked by S&P Global Market Intelligence stands at Strong Buy echoing Morgan Stanley analyst.

Based on 17 Wall Street analysts offering 12 month price targets for Delta Air Lines in the last 3 months. The average price target is $61.30 with a high forecast of $85.00 and a low forecast of $52.00.

The average price target represents a 33.20% change from the last price of $46.02. This could be based on the exposure to corporate travel in the U.S. which are returning to pre-pandemic level, but we also need to be aware of other geopolitical factors.

The ownership structure of Delta Air Lines (DAL) stock is a mix of institutional, retail and individual investors. Approximately 50.29% of the company’s stock is owned by Institutional Investors, 17.07% is owned by Insiders and 32.64% is owned by Public Companies and Individual Investors.

Given the large stake in the stock by institutions, Delta Air Lines' stock price might be vulnerable to their trading decisions. A total of 20 investors have a majority stake in the company with 50% ownership

In the second quarter until May 2024, we are seeing some buying and seeing from the Delta insiders, the amount might not be significant, and in June 2024, we are not seeing any insider trading.

On the hedge fund side, we are also not seeing significant selling and buying of the Delta, this might be positive. With the pick up in corporate travel, Delta might be enjoying the growth and I hope to see this reflected in its upcoming earnings report.

Looking at the price move during earnings, we do see a surprise in its last reported earnings, but for this quarter, though we are looking at higher revenue, but EPS is expected to decline compared to same quarter last year.

The indicator I used actually predict a dip post earnings, which I think might be attributed to Delta higher costs and its economic risks. This happen in Jan 2024, when Delta cuts 2024 profit outlook on the same reason.

So what I would be looking out would be its updated profit outlook, if Delta could do well on controlling the costs side, them we might see a surprise move post earnings.

If we looked at the technical side, indicators like MACD is showing downward moving trend, and we are seeing a descending triangle formed.

A descending triangle is an inverted version of the ascending triangle and is considered a breakdown pattern.

We might see a breakdown occurs is the price continue to decline below the support ($46.02) as the downtrend resumes.

Based on what we are seeing from Delta Air Lines past earnings where the price fell because of 2024 outlook cuts due to higher costs and economic risks. For this upcoming quarter reporting, we might see Delta improve on that, if Delta would be able to provide a better outlook for 2024 on the corporate travel full recovery.

Then we might see Delta Air Lines having an upside move post earnings.

Appreciate if you could share your thoughts in the comment section whether you think Delta would be able to provide a better outlook for 2024?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.