Delta Air Lines 3Q23 Earnings In Focus: BofA Securities Expects No Surprises And Highlights Cost Pressure

BofA Securities analyst Andrew G. Didora reiterated a Buy rating on the shares of Delta Air Lines Inc DAL with a price target of $50.

DAL is slated to report third-quarter FY23 earnings on October 12.

The analyst is not expecting any surprises in 3Q23 results given the company updated current trends in mid-September. The analyst now sees $1.00 in 4Q23 EPS (from $1.09 prior) as cost pressures remain more acute than previously expected.

The key focus points of the earnings, according to the analyst, include whether any soft industry pricing has crept into the premium leisure business, any changes to capacity growth given higher fuel costs and confidence in the 2024 unit cost trajectory of down low-single digits.

The analyst forecasts a 9.3% revenue growth in 4Q23 and believes DAL could guide to revenue growth of 8-11%.

In the September update, DAL revised its 3Q23 unit cost ex-fuel forecast to +1-2% from -1% to -3%, given irregular operations, supply chain challenges and higher

maintenance costs. 

The analyst has tweaked 2023E EPS to $5.85 from $5.88, still below the company’s $6 - $7 guided range.

Price Action: DAL shares are trading higher by 2.33% at $36.06 on the last check Wednesday.