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Shares of Delta and other airlines cooled Friday after climbing yesterday.
Airline stocks, which soared yesterday after Delta’s latest results revived optimism about the sector, have come back to earth a bit today. Some analysts, however, expect tailwinds to continue.
The JETS ETF, which includes several airline shares, was recently down 2% after climbing more than 7% yesterday. Delta Air Lines (DAL), American Airlines (AAL), and United Airlines (UAL), all of which logged double-digit advances yesterday, were in the red today, though to less-dramatic degrees; Delta was off about 1%. (Read Investopedia’s full coverage of today’s trading here.)
Yesterday’s gains were fueled by optimism coming out of Delta, which issued a better-than-Wall-Street expected third-quarter revenue projection and reinstated guidance, the latter of which was read as bullish after an uncertain start to the year. (Delta also reported continued strength in the premium seats business and, separately, a move toward more AI adoption.)
The Delta news “gave the market a bright green light to pile back into the space and investors duly obliged,” Morgan Stanley analysts wrote Thursday.
Several analysts responded to Delta’s report with upbeat moves of their own. Morgan Stanley edged its target for the airline $2 higher to $90, well above the Visible Alpha consensus around $64 and higher than any of the targets tracked by the service. Bank of America lifted its target to $67 from $60.
Some wariness remains, however. Deutsche Bank maintained its $63 price target, characterizing the company’s tone during its report as “cautiously optimistic.”
Delta’s shares remain down about 6% for the year, though they’ve climbed off April lows.
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