Delta Air Lines (NYSE:DAL) has provided a strategic update updating its guidance for Q4 2022 and introducing a guidance for 2023 and even 2024. I have not been a shareholder of airline stocks for many years. Back in 2017 is the last time I owned shares of Delta Air Lines, but I found that airlines were trading in a too choppy fashion gaining and losing on month-to-month capacity and oil price news, but I do believe the current positive momentum does provide significant upside for Delta Air Lines stock, which I will explain in this report.
In October 2022, I marked shares of Delta Air Lines a strong buy based on significant recovery runway ahead for corporate travel, continued demand strength and reduction in unit costs while also off-peak fuel prices are in line of expectation going forward. Did this call work out? If you look at Delta’s stock gaining 10% since publishing that report you would say it did. Reality is that as a strong buy, it did not deliver. A cocktail of slight softening in travel trends and anxiety over a recession hit airline stock harder than other sectors.
However, since July when I marked shares a buy the outperformance that I generally look for with a Buy or Strong Buy name was definitely visible: Delta Air Lines shares gained nearly 15% compared to 5% for the broader market.
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