Delta Air Lines (DAL) could set the tone for airline stocks this week when it reports fourth-quarter results Tuesday before the bell. And if recent travel numbers are any indication, we might be looking at some pretty solid results.

What Wall Street Expects

Analysts are penciling in fourth-quarter revenue of $14.73 billion, which would actually be down from the $15.56 billion Delta posted in last year's fourth quarter. On the earnings side, the Street is looking for $1.53 per share, compared to $1.85 a year ago.

But here's the thing: Delta has been consistently beating expectations lately. The company has topped revenue estimates for six quarters in a row and crushed EPS forecasts for four straight quarters. That track record has analysts feeling pretty optimistic.

Analysts Are Getting Bullish

Speaking of optimism, several analysts have been raising their price targets on Delta in recent weeks. Bank of America analyst Andrew Didora highlighted the airline as one of the top picks in the sector, maintaining a Buy rating while bumping his price target from $74 to $80. Didora particularly likes Delta's strength in premium travel and its robust cash flow generation.

Other firms are equally enthusiastic. Susquehanna kept its Positive rating and lifted its target from $70 to $85. TD Cowen maintained its Buy rating with a new target of $82, up from $77. Goldman Sachs also stayed bullish with a Buy rating, raising its target from $68 to $77.

Record Travel Numbers Tell a Story

The timing of this earnings report is interesting because we just saw some genuinely impressive holiday travel numbers. The TSA screened 3.13 million passengers on the Sunday after Thanksgiving (November 30), setting a new record. Between November 25 and December 1, more than 18 million people passed through TSA checkpoints.

AAA also reported strong December holiday travel demand, with air travel hitting new records. All those people cramming into airports should translate nicely into Delta's fourth-quarter results, along with other airlines in the sector.

Building on Third Quarter Momentum

Delta's third-quarter performance already showed solid momentum, with revenue of $16.7 billion climbing 6% year-over-year. Passenger revenue increased 3% in the quarter, boosted by premium products and loyalty program travel awards. Management felt confident enough to raise both fourth-quarter and full-year guidance after those results.

Now investors will be watching to see if the company can beat expectations again and, perhaps more importantly, what management says about the future. Forward guidance will likely determine whether the stock moves higher or takes a breather after the report.

Broader Sector Implications

Delta is the third-largest holding in the US Global Jets ETF (JETS) at 10.6% of assets, trailing only the top two positions at 11.5% and 11.0%. So how Delta performs could ripple through the entire airline sector and this popular ETF.

Delta shares are currently trading down 2.6% to $70.44 on Monday, sitting within a 52-week range of $34.74 to $73.16. The stock is up 8.2% over the past year, though it's trailing the 13.5% return of the Jets ETF.