Delta Air Lines, Inc. (DAL) shares are experiencing a surge, climbing by 6.09% to $51.72 during Thursday’s trading session. This upward trend is directly linked to the news that Southwest Airlines Co. (LUV) has announced a new $2.5 billion share repurchase program.
Southwest’s bold move, coupled with their enhanced growth projections and cost-saving initiatives, signals a broader wave of optimism for the airline industry’s recovery and profitability. This positive outlook naturally extends to Delta, one of the leading U.S. carriers, as investors anticipate increased interest and potential for stronger earnings growth.
Southwest’s projection of achieving a $4 billion incremental EBIT by 2027 and exceeding a 15% return on invested capital underscores the robust financial health and long-term profitability of major airlines. This positive financial outlook is fostering a more favorable perception of the sector as a whole, leading to a more optimistic investment environment.
Delta stands to benefit from the same industry tailwinds that are propelling Southwest, particularly as both companies share similar challenges and opportunities. The declining fuel costs, a crucial factor in Southwest’s revised guidance for economic fuel costs per gallon, indicates a more favorable cost environment for all airlines.
Furthermore, Southwest’s commitment to operational efficiency, through initiatives like hiring control, schedule optimization, and supply chain improvements, sets a precedent for other carriers, including Delta, to continue driving their own efficiency initiatives. Delta’s longstanding focus on premium service and product differentiation, coupled with its successful cost management strategy, is resonating with investors. The news from Southwest could be seen as an industry-wide validation of the growing profitability potential for major carriers.
As more airlines adapt to evolving customer expectations, Delta’s commitment to premium service and product differentiation could benefit from this broader industry shift. Any moves by competitors to enhance customer satisfaction can encourage broader investment in the sector as airlines strive to attract a loyal customer base and boost long-term revenue.
How to Buy DAL Stock
If you’re interested in participating in the market for Delta Air Lines, whether it’s purchasing shares or exploring potential investment opportunities, you can typically do so through a brokerage account. Numerous trading platforms are available, and many offer the option to buy ‘fractional shares.’ This allows you to own portions of stock without needing to buy an entire share, which can be particularly useful for stocks like Berkshire Hathaway or Amazon.com that can be quite expensive to purchase a whole share.
For Delta Air Lines, currently trading at $51.29, a $100 investment would acquire you 1.95 shares of stock.
If you’re considering betting against a company, the process is more complex. You’ll need access to an options trading platform or a broker who allows ‘shorting’ shares. Shorting involves borrowing shares to sell, aiming to profit when the price drops. This process typically requires an options trading platform. If your broker allows options trading, you can either buy a put option or sell a call option at a strike price above the current share price. Both strategies allow you to profit from a share price decline.
According to data from Benzinga Pro, DAL has a 52-week high of $53.86 and a 52-week low of $30.60.
