Delta Air Lines (DAL) is set to report its Q4 2024 earnings and provide initial 2025 guidance on January 10. BofA Global Research maintains a "Buy" rating with a price objective of $72, citing expected revenue growth as a key catalyst. The report anticipates Delta will guide 2025 EPS to $7-8, aligning with BofA's estimate of $7.34 and the Visible Alpha consensus of $7.37. This guidance reflects a 10% EPS growth communicated at the investor day.
BofA has raised its Q4 2024 revenue growth estimate for Delta to 4.3%, slightly above the top end of the 2-4% outlook, driven by positive industry commentary and capacity backdrop. The report forecasts unit costs to rise by 3.0%, with fuel costs in the upper half of the guided range, resulting in an EPS estimate of $1.78, at the high end of the $1.60-1.85 guidance range.
Looking ahead to Q1 2025, BofA expects total revenue growth to accelerate, with a forecast of 5.4% growth, supported by a 3.8% increase in capacity and 1.5% growth in unit revenues. The report also projects 2025 EPS of $7.34, with revenue growth exceeding 5% each quarter, peaking at nearly 8% in Q3 2025. "Yields will likely be the key driver of 2025 EPS volatility," notes BofA, with every 100bps of yield growth translating to approximately $0.40 of EPS.
Delta Air Lines was trading at $61.67, up 0.8% on January 8.