Delta Air Lines Inc (NYSE:DAL) will set the tone for the airline earnings season when it reports this Thursday, though it has qualities that its not all its rivals enjoy to allow it to navigate industry issues better than others, said Bank of America.
Shares in Delta have fallen 12% since a mid-May peak, reflecting "skittishness around domestic capacity", promotional activity and negative guidance revisions from rivals American and Southwest Airlines in recent weeks.
"While DAL is not immune to these industry dynamics, we believe its premium, corporate, and international exposures allow the airline to navigate these issues better than others," BofA said.
Second-quarter earnings are expected to touch down at $2.37, according to the Wall Street analyst consensus, with BofA having raised its estimate to $2.41.
Delta will also provide new third quarter guidance, where BofA forecasts capacity and unit revenues growth of 5.1% each, resulting in a total revenue growth of 5.2%.
While maintaining their 'buy' rating on the stock, the bank's analysts tweaked their Q3 and full-year 2024 EPS modestly lower but think management will reiterate its $6-7 guidance "with commentary towards the higher end".