Will Strong Passenger Demand Push Delta Air Lines Stock Higher Post-Earnings?

Will Strong Passenger Demand Push Delta Air Lines Stock Higher Post-Earnings?

12 September 2018, Hessen, Frankfurt/Main: The Delta logo is on a passenger aircraft of the airline ... [+] Delta Air Lines, which is located on the apron of Frankfurt airport. Photo: Silas Stein/dpa (Photo by Silas Stein/picture alliance via Getty Images) The spike in benchmark oil prices from $70 in early January to $100 at present has weighed on airline stocks including Delta Air Lines (NYSE: DAL). Fuel costs account for a fifth of Delta's operating expenses and the 50% increase is expected to make a dent on the bottom line in Q1 2022. Delta's stock has observed a $12. 6 billion contraction in market capitalization from pre-pandemic levels despite burning just $529 million of operating cash. Per annual filings, the company does not have significant fuel hedges to shield itself from an oil price surge. Considering an operating loss from high fuel prices for the quarter, investors seem to be too pessimistic on the stock despite strong passenger demand. Our interactive dashboard on Delta Air Lines Earnings Preview highlights the historical trends in revenues, earnings, valuation multiple, and forecast for Q1 2022. Before the pandemic, Delta Air Lines' revenues observed an average growth rate of 6% p. a. from