Here’s Why You Should Buy Delta Air Lines,Inc. (NYSE:DAL) Before Earnings

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Delta Air Lines, Inc. (NYSE:DAL) is on investors’ radar these days after the stock received bullish outlook from investment firm Evercore ISI. Evercore analysts Duane Pfennigwerth and Raymond Wong said that Delta Air Lines, Inc. (NYSE:DAL) shares have now transitioned to “leading” from “lagging” amid a massive margin expansion, which is expected to grow more in the second half of 2017. The analysts also mentioned Delta’s June traffic report, according to which the traffic for the airliner increased to 20.83 billion RPMs from 20.26 billion RPMs reported in the same month of 2016. Load factor in the period was 88.5% compared to 87.7%, up 0.8 percentage points. Delta Air Lines, Inc. (NYSE:DAL) also issued an investor update for the second quarter of 2017 according to which margin guidance is slightly ahead of the estimates, and total revenue is also ahead of the forecasts. However, revenue growth is offset by higher share count. Three months ago, the company said its revenue per available seat mile (PRASM) would increase 1%-3% year over year. Last week, Delta said its PRASM increased by 2.5% in June. EPS estimates for the second quarter are also in-line with the consensus forecast, up 12% y/y.

Experts think that the recent positive trends at Delta Air Lines, Inc. (NYSE:DAL) aren’t temporary. The airline will sustain its growth in 2017 and 2018. Most of the airline stock gained value in April amid an explosive PRASM growth due to Easter. But April was the worst month for Delta.

Delta Air Lines, Inc. (NYSE:DAL) will announce second quarter results on July 13. After months of revenue declines, the company is expected to report revenue growth in the period. The stock is poised to grow after the results.

The stock is up over 11% since the start of this year. Delta Air Lines, Inc. (NYSE:DAL)’s full-year estimate has moved higher by over 5%. The company’s margins will increase in the future due to plummeting oil prices.

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