In an investor day presentation on Tuesday morning, Delta Air Lines (DAL), raised its outlook for 2023 and maintained its fiscal 2020 view. DAL's stock rose Tuesday after the announcement.
Delta Air Lines anticipates that its earnings for fiscal 2023 (ending Dec. 31) will be at the upper end of their previous expectations, which ranged between $5 and $6 per share. Free cash flow is expected to be $3 billion, up from the previous forecast of $2 billion. Delta's previous forecast predicted an operating margin of 10% to 14%.
The company expects to achieve a higher return on capital invested (ROIC) than its previous forecast of double-digit growth. Delta forecasted earnings per share of more than $7 and free cash flow exceeding $4 billion for fiscal 2024. Delta anticipates operating margins between 13% and 15 percent and ROICs in the mid teens.
The company also raised its revenue forecast for the second quarter to a range between 17% and 18%. It had forecasted a 15% to 17% increase. Delta has increased its revenue forecast for the current fiscal period to 17% to 20 percent growth compared to the previous forecast of 15% to 20%.
Delta's revenue forecast for 2023 is centered at $54 billion. Delta's presentation stated that the "long-term target" was to generate more than $60 billion of total revenue.
FactSet polled DAL stock analysts who predicted fiscal 2023 earnings of $5.88 per share and $53.64 billion revenue. Analysts predict fiscal 2024 earnings at $7.12 per share and $55.79 billion sales.
UAL shares briefly surpassed the entry point of 54.05 on June 19, but then re-acquired it. During trading on Monday, shares jumped from their 10-day moving median. Early Tuesday, UAL shares rose 2.8%.
AAL shares surged past their 16.72 purchase point on Tuesday. American Airlines has also surpassed its entry date of June 19, 2009. The shares bounced off the 10-day line while holding their other technical moving averages. AAL shares advanced by 3.1% on early Tuesday.
Delta shares rose 2.5% on Tuesday morning following the updates to outlook. After a big run up in late May, shares surpassed the entry of 40.30 for a cup-base on June 13. The current breakout extends beyond the buy zone which extended to 42.31.
DAL's stock price has increased by more than 34.7% this year.