Économie

Delta Air Lines: Multiple Expansion Ahead

Delta Air Lines: Multiple Expansion Ahead

The airlines have been finally identified by the strong numbers Delta Air Lines ( DAL ). Investors need to keep this expansion going this week, leaving a long way to go. Key Catalysts A couple of key catalysts are finally grabbing investor attention. First, the airlines from the quarterly report for Delta to the December traffic report from United Airlines ( UAL Confirmed positive income is sustainable. Second, the tax cuts are a big boost to the bottom line. For Delta, returns in the final quarter of 2017 jumped over 8%, partially boosted by refinery sales. My past research focused on the market has always been focused on slowing down the price of fuel. As always, the stock market has a mind of its own. One interesting metric to the list of actors in the stock buybacks that reduces the share count. Q4 from 737 million to 711 million shares served to drive the revenue.
DAL data by YCharts The stock was slow to follow this shift, but the suggestion from the chart is that Delta has a long rally ahead. Revenue per share jumped to $ 58 after Q4 growth that is not in the above numbers yet. The other major benefit is the reduction of the taxable income of the taxpayer. The lower tax rate boosts the bottom line to the tune of over $ 1 per share. Due to the strong Q4 results that included a $ 0.07 EPS beat, analyst estimates for 2018 have suddenly soared to over $ 6.75 per share. DAL EPS Estimates for Next Fiscal Year data by YCharts The rate of dropping from 37% to 23% on average, but the market has been reduced to about 25% in the United States. The acknowledgment of the bottom line boost. Still No Multiple Expansion The reality is that the market misses the extreme valuation in Delta shares and the surprise price is a sudden boost. The stock has not even reached $ 60 yet, meaning that the $ 5 tax savings alone. DAL PE Ratio (Forward 1y) data by YCharts Delta still only trades 9x forward EPS estimates. Multiple expansion has not yet occurred yet, providing plenty of upside down when this occurs.
Takeaway The key investor takeaway is that is that it is reaching new highs after strong reports and tax savings. If anything, the stock is even cheaper now, making Delta has a long-term position to keep.
Disclosure: I am / we are long UAL.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with this article.
Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken into consideration. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

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