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Key Stats for DAL Stock
- 1-Day Price Change for DAL stock: 12%
- Current Share Price: $56.78
- 52-Week High: $70
- DAL Stock Price Target: $59
What Happened?
Delta Air Lines (DAL) stock surged 12% on Thursday after the airline reinstated its full-year profit guidance and signaled stronger summer travel demand than Wall Street anticipated.
It reported second-quarter adjusted earnings of $2.10 per share, beating analyst expectations of $2.06, on revenue of $16.64 billion that also topped forecasts.
CEO Ed Bastian stated in an interview that bookings have stabilized after earlier demand weakness, although at lower levels than initially forecast.
The airline now expects full-year adjusted earnings of $5.25 to $6.25 per share, down from its original January forecast of more than $7.35 per share, but providing crucial visibility after months of uncertainty surrounding travel demand.
The positive guidance comes as the broader airline industry has struggled with hesitant consumer spending and capacity oversupply.
Delta and other carriers had previously withdrawn their financial guidance in April amid concerns about tariffs and softening bookings.
Bastian credited the passage of recent tax legislation and improved trade clarity for giving customers more confidence to book travel.
See analysts’ growth forecasts and price targets for Delta Air Lines (It’s free!) >>>
What the Market Is Telling Us About DAL Stock
The 12% rally in DAL stock reflects investor relief that Delta can provide financial guidance again and that travel demand appears to be stabilizing after a turbulent first half.
The airline’s ability to beat earnings expectations while managing through a challenging environment demonstrates the strength of its premium-focused business model and diverse revenue streams.
Delta’s performance stands out given the industry headwinds. Its premium product revenue grew 5% year-over-year, while main cabin revenue fell 5%, demonstrating the value of its strategy in targeting higher-spending customers.
Its lucrative American Express partnership also drove strong results, with remuneration growing 10% to $2 billion in the quarter.
However, the reinstated guidance still represents a reduction from original expectations, highlighting ongoing pressure on the airline industry.
For the third quarter, Delta expects earnings per share of $1.25 to $1.75, compared to Wall Street’s $1.31 forecast, suggesting continued caution about near-term demand trends.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!