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Delta Air Lines posts record Q3 revenue despite fuel-cost pressure
MarketBeat Ratings notes Delta’s fuel-cost headwinds prompted analysts to trim price targets, even as the firm retained a Buy consensus.
Delta Air Lines is facing a potential Q4 pullback as rising fuel costs cut into earnings, even though the company’s operating results remain strong. MarketBeat Ratings says the pullback could extend to as low as $70 before stabilizing.
The outlet attributes the durability to record Q3 revenue, supported by broad-based demand, and it highlights a high probability that the revenue trend can continue into Q4 and carry into the next year.
MarketBeat Ratings also points to oil prices as the key wildcard for Delta’s fuel expense outlook, citing the Iran conflict as weighing on oil prices today but expecting that effect to fade. It adds that backwardation indicators suggest oil could drop back into the $80 region over the coming months, with additional uncertainty tied to global oil market shifts.
Despite the earnings drag from fuel costs, MarketBeat Ratings characterizes the situation as self-inflicted, with Delta absorbing higher fuel expenses to sustain and grow market share, while results are still described as sufficient to support strategic improvements and ongoing dividend payments.