Will Delta Take Off?

The airline industry has been somewhat short of underwhelming this summer as other stocks have not only recovered in share value from the March crash, but flown right past their March levels. A slow recovery is understandable as flying will most likely be one of the last things the vast majority of America is comfortable with in terms of the virus. This has not stopped some Americans from still flying as they always have though, and it can be theorized that as months of the pandemic moves on, more and more people have been willing to fly. If you combine this with most airlines tightening up their fleets to lower costs, and another possible stimulus bill for the sector, airlines could most likely be doing better off. One airline I am zeroing in on is Delta Airlines ($DAL). Delta has an earnings estimate of about -3.04 EPS and is expected to announce earnings before market open on October 8th, a week from today. With this low of an expectation combined with all the parameters I just mentioned for the airline, I believe Delta can be boosted after its earnings announcement because I do not believe the report will be as severe of a drop as 3.04. I also believe this because last quarter, their report was so bad that the surprise rating was a -11.6%. Due to the minimal recovery of the airline sector, I am unsure yet if Delta will really gain volatility ahead of its earnings announcement, so we will have to see what it does the rest of today and tomorrow before trying to play any type of run up. As always, play earnings at your own risk, with the poor recovery of the sector, the outlook on the stock post earnings could be so bleak that movement is limited or unfavorable.

-Darnel Shillingford

Leave a Reply

%d bloggers like this: