{"id":17214,"date":"2023-06-02T09:55:06","date_gmt":"2023-06-02T13:55:06","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/delta-air-lines-stock-poised-for-strong-gains\/"},"modified":"2023-06-02T09:55:07","modified_gmt":"2023-06-02T13:55:07","slug":"delta-air-lines-stock-poised-for-strong-gains","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=17214","title":{"rendered":"Delta Air Lines Stock Poised For Strong Gains?"},"content":{"rendered":"
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Delta Air Lines stock<\/strong> (NYSE: DAL) currently trades at $36 per share, more than 30% below its level in April 2021, and it seems like it has the potential for sizable gains. Delta Air Lines
\n DAL
\n <\/fbs-ticker> saw its stock trading at around $29 in late June 2022, just before the Fed started increasing rates, and is now 25% above that level. The stock has gained 30% since its low in September 2022 compared to the S&P 500, which gained about 10% during this period. The rally in the stock over recent months has been driven by a steady decline in the inflation rate in response to the Fed\u2019s aggressive rate hike plan \u2013 although investors still have concerns about a potential recession. The notable increase in Delta Air Lines\u2019 revenues<\/strong> over recent quarters has also contributed to the stock recovery.<\/p>\n

Returning to the pre-inflation shock level means that DAL stock will have to gain more than 40% from here. We believe that this will materialize over time and estimate Delta Air Lines\u2019 valuation<\/strong> to be around $50 per share, implying over 35% gains. This is because the company has seen a strong recovery in travel demand over the recent quarters, evident from its total available seat miles, which grew 18% y-o-y, and its passenger revenue per available seat mile rose 27% to 16.97 cents in Q1. Furthermore, the company has expanded its operating margins from 1.4% in 2021 to 4.0% now. Our Delta Air Lines Operating Income Comparison<\/strong> dashboard has more details. A continued expansion of top-line and operating margin means that Delta Air Lines will see strong earnings growth in the near future. In fact, we forecast adjusted earnings to rise a significant 73% y-o-y to $5.55 in 2023.<\/p>\n

Our detailed analysis of Delta Air Lines\u2019 upside post-inflation shock<\/strong> captures trends in the company\u2019s stock during the turbulent market conditions seen over 2022 and compares these trends to the stock\u2019s performance during the 2008 recession.<\/p>\n

2022 Inflation Shock<\/strong><\/p>\n

Timeline of Inflation Shock So Far:<\/p>\n

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