Delta Air Lines
’ incredible 15-day winning streak is finally over.
The stock closed just 0.2% lower Friday but it was enough to bring an end to the carrier’s record run. But with the Delta’s (ticker: DAL) investor day just around the corner, it may not be the end of the stock’s move higher.
The streak began on the Thursday before Memorial Day weekend, which proved to be a bumper few days for air travel, and lasted until the eve of the next public holiday—Juneteenth. The shares rose around 23% over that period.
Given the winning run was centered around optimism about summer travel demand, the timing of the streak’s termination might seem strange.
More than 2.7 million people passed through U.S. airport checkpoints Thursday, the Transportation Security Administration (TSA) said Friday, narrowly beating 2019 levels. It expects another 10 million or more through the rest of the holiday weekend.
That puts it on track to beat Memorial Day weekend, when around 9.8 million people traveled Friday through Monday, according to TSA data.
But the streak was always going to end at some point. In fairness, it was set to end a day earlier before Delta announced plans to resume dividend payments for the first time since scrapping them in March 2020.
Delta reinstating the dividend feels like a big moment for the carrier, which said the move reflected progress made on its three-year financial plan and the fact that it has repaid more than $10 billion in debt in the past two years.
It wasn’t just Delta’s streak that ended Friday, eight-day winning runs by
United Airlines
(UAL) and
American Airlines
(AAL) were also snapped.
The industry’s rally was due a pause, as investors await more signs that travel demand is staying strong. If Juneteenth data aren’t enough, Delta’s investor day next week may provide that next leg higher. Wolfe Research analyst Scott Group expects upbeat commentary and said Delta could raise its full-year earnings guidance.
Write to Callum Keown at [email protected]
Read the full article here
