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Look out for Delta with upcoming profit margin boost of 5.6%

PI
PittTheYoungerInvested
Community Contributor

Published

February 21 2025

Updated

February 21 2025

As of now, Delta is the leading carrier among the major US airlines.

In terms of profitability, fleet management/modernisation and thus cost effectiveness, and yield management, the guys from Atlanta rule the roost.

With a careful, yet adequate capacity expansion, DAL ably defends its market share while protecting its average load factor which is outstanding for a legacy carrier in a cut-throat competition market such as air travel in the US.

There are two major threats to the company's prospects, though, that shouldn't go unnoticed. As all the major US airlines, its balance sheet is quite strained and always at risk of sudden, exogenous shocks such as another pandemic or a trade war in North America going rogue. Margins are so thin they simply cannot accomodate any major impact, so you got to be vigilant when investing in an airline even as big as this one.

That said, as long as there're no clouds to be seen, the sky's the limit for Delta.

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Disclaimer

The user PittTheYounger has a position in NYSE:DAL. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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Fair Value
US$68.1
11.8% undervalued intrinsic discount
PittTheYounger's Fair Value
Future estimation in
PastFuture-13b69b2014201720202023202520262028Revenue US$69.3bEarnings US$4.2b
% p.a.
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Current revenue growth rate
2.81%
Airlines revenue growth rate
4.05%