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Delta Air shares close lower on Thursday, positive cash flow expected by spring, CEO says

Delta Air Lines Inc (DAL) is still expected to achieve positive cash flow by the spring, Ed Bastian, the company’s Chief Executive Officer, said in a Friday memo.

Delta Air shares closed lower for the sixth time in the past ten trading sessions in New York on Thursday. It has also been the steepest single-session loss since December 24th. The stock went down 0.86% ($0.35) to $40.21, after touching an intraday low at $39.76, or a price level not seen since December 24th ($39.60).

In 2020, Delta Air’s stock went down 31.24%, thus, it underperformed the S&P 500, which registered a 16.26% gain.

According to Delta Air’s Chief Executive Officer, the air carrier will probably “experience two distinct phases during the next 12 months.”

The first phase is expected to be similar to 2020.

“The second phase will begin only when we reach a turning point with widely available vaccinations that spur a significant return to travel, particularly business travel,” Bastian said in the memo.

Delta Air’s revenue shrank 76% year-on-year to $3.1 billion during the third quarter.

“As difficult as 2020 was, in many ways I expect the next 12 months to be even more challenging,” Delta’s Chief Executive also said.

Analyst stock price forecast and recommendation

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Delta Air’s stock price, have a median target of $45.00, with a high estimate of $55.00 and a low estimate of $30.00. The median estimate represents an 11.91% upside compared to the closing price of $40.21 on December 31st.

The same media also reported that at least 11 out of 23 surveyed investment analysts had rated Delta Air’s stock as “Buy”, while 10 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.

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