Delta Air Lines (DAL) is set to report earnings for the first quarter of 澳洲幸运5官方开奖结果体彩网:fiscal 2024 on Wednesday, just over a week after 澳洲幸运5官方开奖结果体彩网:Morgan Stanley anꦏalysts called the airline a top pick for the year, pointing to the air carrier's push into expanding premium offerings.

The airline is expected to post revenue of $13.15 billion, up 3.1% from the year-earlier period, according to analysts' estimates compiled by Visible Alpha. Adjusted net income is pegged at $230.8 million, versus $163 million in the first quarter of 2023, while 澳洲幸运5官方开奖结果体彩网:earnings per share (EPS) are seen at 36 cents, up from 25 cents.

Delta shares, along with those of other airlines and 澳洲幸运5官方开奖结果体彩网:cruise lines, are still recovering from massive pandemic losses. They've gained more than 18% so far this year and nearly 40% in the last 12 months, closing Tuesday at $47.32, but are still well below their record high of $63.44 set in July 2019, before the pandemic decimated revenue and stock p🐠rices across the travel industry.

Morgan Stanley analysts wrote that the company was undervalued, and its current trajectory of shifting to focus on more premium offerings and higher-spend customers could mirror the rise clothing company 澳洲幸运5官方开奖结果体彩网:Abercrombie & Fitch's (ANF) st꧙ock has seen of late, jumping 32% this year and more than quadrupling in value in the last 12 months.

The Morgan Stanley analysts raised their 澳洲幸运5官方开奖结果体彩网:price target on Delta stock to $85 from $77 and their "bull case valuation" to $110 from $90. Bank of America analysts also expressed optimism about the airline's earnings in a note last week, reiterating a "buy" rating and raising Delta's price objective to a more conservative $53, up from $50.

Key Metric: Load Factor

Investors will be watching to track Delta's quarterly 澳洲幸运5官方开奖结果体彩网:load factor, the percentage of available sea𝔉ting capacity that is filled with passengers.

The cost of flying a plane from one destination to another is relatively fixed no matter how full the plane is, so the more seats on a plane an airline can fill, the more profitable each individual flight is. Delta 澳洲幸运5官方开奖结果体彩网:averaged a load factor between 82% and 88% in the two fiscal ♏years before COVID-19, but the statistic dipped 🌳to 55% for fiscal 2020 as the pandemic raged.

Delta's passenger load factor was 81% in the first quarter last year, and reached 88% in the second and third quarters of 2023 before settling at 84% during the busy holiday travel season. If Delta's load factor remains consistently above 80% in the first quarter and through the rest of this year after reporting 85% for fiscal 2023, investors could see it as a sign that Delta is still on track to return to its pre-pandemic levels of performance.

Load factor across the airline industry in 2023 was 82.3%, putting Delta slightly above average, according to the International Air Transport Association, which tracks load factor and other flight data.

Business Spotlight: Premium Offerings

After Morgan Stanley analysts highlighted the trend earlier this month of Delta's ongoing shift to more premium offerings and younger, wealthier customers, a key portion of Delta's earnings report and call could be growth in those categories.

Delta said in last year's Q1 report that premium product revenue and "diverse revenue streams" had grown to 56% of total adjusted operating revenue, and Morgan Stanley analysts wrote that premium products represented $19 billion of Delta's 2023 revenue, about 35%.

Among people Morgan Stanley surveyed, those who earned over $150,000 were by far the most likely to say they were planning to travel in the next six m♐onths, which also represents the most likely segment to spend more on things like air travel𓄧.

Delta's "premium products" sales rose to $4.02 billion in the first quarter of 2023, compared to $2.54 billion in the same period in 2022, a 58% year-over-year increase.

UPDATE—April 9: This article has been updated with the latest consensus estimates from analysts, as well as recent stock price information.