Delta Air Lines Profit Expected To Soar 75%

Delta Air Lines (DAL) is forming a cup base and nearing a buy point. The airline stock is on its longest winning streak in almost 15 years.

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The Atlanta-based airline transports cargo and nearly 200 million passengers annually to 275 destinations in 50 countries.

Delta is ranked first out of 19 stocks in the Transportation-Airline group. The group is ranked a high 15th out of 197 IBD industry groups.

Delta Air Lines Stock Nears Buy Point

Delta stock rose for 10 consecutive days as of Thursday and is about 3% off its 52-week high. Shares are also about 3% from the 40.30 buy point of a cup base.

DAL dipped 1.1% on April 13, in heavy volume, after the company reported its Q1 earnings.

Shares got a 6.2% boost in robust volume on May 17, on debt-ceiling resolution hopes and a U.S. Federal Aviation Administration (FAA) forecast for nearly 313,000 flights for the seven-day Memorial Day travel period.

The jump lifted the stock above its 50-day moving average to start the steep uptrend.

Strong Earnings Growth Continues

Delta posted lower-than-expected first-quarter earnings but higher than forecast sales on April 13. The 25-cent quarterly EPS was a vast improvement over the prior year’s $1.23-per-share loss.

The airline posted decelerating sales growth of 36%, down from 42% and 53% in the prior two quarters.

Delta President Glen Hauenstein said in a statement that with “record advance bookings for the summer,” the company expects June quarter revenue to be 15% to 17% higher on capacity growth of 17% year over year.

Ed Bastian, Delta’s CEO, expects $2 to $2.25 EPS for the June quarter, and full-year EPS of $5 to $6 per share. Bastian also guided for 15% to 20% full-year revenue growth.

Analysts project an impressive 75% full-year earnings growth this year and 25% next year. Mutual funds have bolstered shares in the last two quarters.

Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.

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