Delta Air shares close slightly higher on Tuesday, first-quarter unit revenue growth to slow further, airline forecasts

Yesterday Delta Air Lines Inc (DAL) said that it projected a further slowdown in revenue growth per mile flown during the first quarter due to an impact from the partial US government shutdown, which entered its 26th day on Wednesday.

Delta Air shares closed higher for the sixth time in the past ten trading sessions on Tuesday. The stock edged up 0.17% ($0.08) to $47.83, after touching an intraday high at $49.29, or a price level not seen since January 2nd ($50.16).

Shares of Delta Air Lines Inc have retreated 4.15% so far in 2019 compared with a 4.13% gain for the benchmark index, S&P 500 (SPX).

In 2018, Delta Air’s stock dropped 10.89%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Delta said on Tuesday that its total operating revenue had increased 5% year-on-year to $10.74 billion during the quarter ended on December 31st, which matched the median analyst estimate.

However, the air carrier underscored that annual growth in unit revenue, a metric which reflects the relation between sales and flight capacity, would be adversely affected during the present quarter by factors such as the timing of Easter, intensifying foreign exchange headwinds as well as the partial government shutdown in the United States.

According to Ed Bastian, Delta Airs Chief Executive Officer, the partial government shutdown will probably translate into $25 million in lost revenue for the company in January.

Delta Airs unit revenue was reported to have surged 3.2% during the fourth quarter from a year ago. The airline expects that the same metric will register between zero and 2% growth during the current quarter.

Meanwhile, the companys earnings per share, excluding special items, were reported at $1.30 during the quarter ended on December 31st. In comparison, analysts on average had expected adjusted earnings of $1.27 per share.

The airline now forecasts first-quarter earnings within a range of $0.70 and $0.90 per share, while the median forecast by analysts points to earnings of $0.94 per share.

According to CNN Money, the 21 analysts, offering 12-month forecasts regarding Delta Air’s stock price, have a median target of $66.90, with a high estimate of $95.00 and a low estimate of $62.00. The median estimate represents a 39.87% upside compared to the closing price of $47.83 on January 15th.

The same media also reported that 17 out of 21 surveyed investment analysts had rated Delta Air’s stock as “Buy”, while 1 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Delta Air Lines Inc (DAL) are presented as follows:

Central Pivot Point – $47.76
R1 – $49.71
R2 – $50.85
R3 – $52.80
R4 – $54.74

S1 – $46.62
S2 – $44.67
S3 – $43.53
S4 – $42.38