Why Delta Airlines (DAL) Stock Is Up Today

NEW YORK (TheStreet) -- Delta Airlines (DAL) was gaining 1.2% to $41.24 Tuesday after the airline reported financial and operating performance for May 2014.

Delta reported that consolidated passenger unit revenue, or PRASM, increased 7% year-over-year in May 2014. The increase was driven by revenue gains in domestic and transatlantic entities. The airline cited hubs in Atlanta, New York, and Seattle, as particularly strong in the month.

The airline reported a completion factor of 99.9% and an on-time arrival rate of 84.4% in May.

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TheStreet Ratings team rates DELTA AIR LINES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate DELTA AIR LINES INC (DAL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels, solid stock price performance, compelling growth in net income and revenue growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to other companies in the Airlines industry and the overall market, DELTA AIR LINES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 2400.00% and other important driving factors, this stock has surged by 122.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DAL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 2942.8% when compared to the same quarter one year prior, rising from $7.00 million to $213.00 million.
  • The revenue growth significantly trails the industry average of 42.0%. Since the same quarter one year prior, revenues slightly increased by 4.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • You can view the full analysis from the report here: DAL Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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