Travelers and Delta Air Lines stay favored on Ritholtz list as earnings underpin gains

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Travelers, Delta favored on Ritholtz

Highlights

Travelers shares gained 12% since June 11, reporting first-quarter core income of $1.7 billion, $7.71 EPS, and a 19.7% ROE with renewed dividend growth.
Delta's second-quarter adjusted revenue rose 14% to $17.7 billion, adjusted EPS reached $1.56, and premium revenue jumped 17% amid just 1% capacity growth.
Delta reaffirmed 2024 full-year adjusted EPS guidance of $6.50–$7.50 and free cash flow of $3–4 billion despite 75% higher fuel costs and buyable post-earnings pullback.

Stock picks tested by earnings and trend support

As reported by CNBC, Josh Brown and Sean Russo highlight Travelers and Delta Air Lines as examples of positions that continue to work after their initial inclusion on the Best Stocks in the Market list, arguing that patience matters more than frequent portfolio rotation.

As of July 13, the list contains 209 names. The pair say Travelers has gained 12% since they revisited the stock on June 11, while Delta is up 2% since a June 22 update and 23% since their original December write-up.

Travelers reports second-quarter results on Friday after a first quarter that included $1.7 billion in core income, $7.71 per diluted share, a 19.7% return on equity and a seventh straight quarter with more than $1 billion in underlying underwriting income. The insurer also returned $2.2 billion to shareholders in the quarter, including $2 billion in buybacks, and raised its dividend 14% for a 22nd consecutive annual increase.

Brown says Travelers has broken above the $308 to $310 resistance range identified in June and, despite a recent pullback from nearly $350 to about $338, the broader uptrend remains intact. He points to the 50-day moving average near $309 as a key trading reference and says investors should watch the $300 level, while the 200-day moving average near $294 continues to define the longer-term trend.

Earnings reinforce demand outlook in insurance and air travel

For Travelers, Russo says investors should watch the effect of the first-quarter equity market selloff on the company's alternative investment portfolio, as that impact arrives with a one-quarter lag. He also notes that the second quarter is typically the heaviest period for homeowner weather losses, although management still targets a mid-teens core return on equity and is currently running above that level.

Delta, meanwhile, has already reported second-quarter results showing adjusted revenue of $17.7 billion, up 14% from a year earlier, adjusted earnings per share of $1.56 and adjusted pre-tax profit of $1.4 billion. Premium revenue rises 17%, corporate sales post double-digit growth and total unit revenue increases 12.4% as capacity grows just 1%, which the authors describe as evidence of pricing power.

Even with adjusted fuel costs at $3.93 per gallon, up 75% year over year, Delta reaffirms full-year guidance for adjusted earnings per share of $6.50 to $7.50 and free cash flow of $3 billion to $4 billion. Brown says the post-earnings pullback looks buyable, with the 50-day moving average near $80 acting as a key support level and a potential rally above $100 preserving the upside case so long as the chart structure remains intact.

Our earlier analysis of Goldman Sachs (GS) focused on a bullish weekly technical setup ahead of the company’s Q2 earnings, with the stock holding above key moving averages despite a modest pullback. We noted a likely consolidation range around $1,018–$1,073 and flagged that a breakout above resistance could open the door to fresh highs, while a drop below support would raise correction risk.

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